
First-Time
Buyers
Buying your first home is an exciting milestone, but it can also be a daunting process filled with unfamiliar terms and complex decisions. For first-time buyers, navigating the world of mortgages might seem overwhelming, but this is where Knightwood Mortgages can make a significant difference. We will support you through every stage of your first-time buyer journey, from the moment you decide to purchase a property to the day you collect the keys to your new home. Our experienced mortgage advisors will help you understand your financial options and find the most competitive mortgage product on the market tailored to your needs. At Knightwood Mortgages, your dream of owning a home becomes a stress-free and an achievable reality.
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Knightwood is dedicated to building long-term relationships with our clients, founded on trust, honesty, and transparency. Throughout your entire home-owning journey, from your first home to your last, we are here to cater to all your financial needs.
What is a First-Time Buyer?
A first-time buyer is an individual/s purchasing their first home and has not previously owned a property. This status often comes with certain benefits, such as access to special mortgage deals, lower deposit requirements, and government schemes aimed at helping people get onto the property ladder.
For instance, in the UK, first-time buyers may qualify for schemes like the First Homes Scheme or Help to Buy, which make buying a home more affordable. Being a first-time buyer can simplify the process and provide financial incentives to assist with the purchase of your first property.
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The definition of a first-time buyer can vary between lenders and some lenders may consider you a first-time buyer if you have not owned a property for at least three years, while others may have different criteria.
How much can I borrow?
What are the initial first steps for a first time buyer?
As a first-time buyer, here are the first steps you can take when applying for a mortgage:
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Check your credit score - your credit score plays a crucial role in a lender's decision to approve your mortgage application. You can check your credit score through credit reference agencies such as Experian, Equifax, or TransUnion.
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Determine how much you can afford - Understanding your borrowing capacity before applying for a mortgage is essential. This knowledge will enable you to focus your property search on homes that align with your budget.
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Obtain a mortgage pre-approval - Securing a pre-approval provides an estimate of your borrowing capacity and enhances your appeal to sellers. Pre-approvals generally remain valid for a limited period, typically around three months.
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Gather the necessary documents - When applying for a mortgage, you'll need to provide various documents, including proof of income, bank statements, and identification. Preparing these documents ahead of time can streamline the mortgage application process.
What is an Decision in Principle?
A Decision in Principle (DIP), also referred to as an Agreement in Principle (AIP), is a certificate document from a lender on how much they are willing to lend you, subject to a full assessment. This usually involves a soft credit check and a review of your income and expenditure. The document can be presented as proof to support offers made to estate agents on properties.
Securing a Decision in Principle at the earliest opportunity gives you confidence when making an offer on a property, knowing you can afford it. It also enhances your negotiating power by showing the agent
that you're a serious buyer.
It doesn't lock you into a specific product or lender, and they are usually valid for 60 to 90 days, with extensions available. Therefore, it's highly advisable to secure one before you start viewing properties.
What is Stamp Duty Tax?
Stamp Duty Land Tax (SDLT) is a tax paid by buyers of property or land in England and Northern Ireland. The amount of SDLT you owe depends on the purchase price of the property. It's calculated as a percentage of the property's purchase price, with different rates applied at various price thresholds.
First-time buyers may benefit from reduced or exempt rates on properties up to a certain value. More details on the marginal rates of tax can be found on the governments website:
​Stamp Duty Land Tax: Residential property rates - GOV.UK
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Alternatively, feel free to use the Stamp Duty Calculator below to calculate the amount of tax you'll owe:
How do I know what my credit score is and how do I improve it?
You can check your credit report with multiple credit reference agencies, including Experian, Equifax, and TransUnion. Typically, there is a fee for obtaining a copy of your credit report, and some agencies might also charge an ongoing fee for continued use of their services.
Ensuring all your credit commitments are current and paid on time is the best way to improve your credit score. Late or unpaid utility and phone bills can negatively impact your mortgage prospects.
Being on the electoral register is important. Even if you don't vote, registering helps companies verify your identity, which significantly impacts your credit score.
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Download a copy of your credit report here:
What is the first home scheme?
The First Homes Scheme is a government initiative designed to help first-time buyers in England get onto the property ladder by offering homes at a discount of 30% to 50% off their market value. The property can be a newly built home from a developer, or a resale property purchased through an estate agent that was initially bought under the scheme.
To be eligible, buyers must be 18 or older, have an annual income below £80,000 (or £90,000 in London), and the property must be their main residence. The scheme aims to make homeownership more affordable, especially for key workers and those on lower incomes.
How can Knightwood Mortgages help?
When purchasing a property for the first time it often can feel overwhelming. Having a broker experienced in dealing with first-time buyer mortgages can help you understand all available options and give you the best chance of success with your application.
At Knightwood Mortgages, we're dedicated to making your first mortgage application process as easy as possible. Contact us to find a suitable mortgage deal as a first-time buyer by emailing services@knightwoodmortgages.co.uk or calling 03301 336045.