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First Time Buyer Mortgage

To secure a First Time Buyer Mortgage the borrower will need at least a 5% deposit but this can be a gift from a family member.

The minimum age for a First Time Buyer mortgage is age 18 but many lenders have set a minimum age limit of 21 years before they will accept an applicant whether they are a first time buyer or a home mover.

A first time buyer could be purchasing a property for his or her main residential home or they could even be buying the property on a buy to let basis to generate rental income. It is, however, very difficult to obtain a first time buyer mortgage to purchase a property to let-out as when you do not already own a property as your main residence you will classified as a first time buyer.

If you are an existing home owner it is relatively easy to qualify for a Buy To Let mortgage and as a first time landlord as there is a wide range of Buy to Let lenders who welcome first time landlords (who already are homeowners themselves).

A first time buyer could also be someone who has inherited a property or been gifted a property outright.

A first time buyer could even be someone who has previously owned a property with a mortgage where they have sold the property and redeemed the mortgage and there is a gap where they rent or live with family before purchasing again. This time gap needs to be at least 12 months before you are re-classified as a First Time Buyer and applicable for a First Time Buyer mortgage again although most lenders look for at least a 24 month gap.

Many mortgage hunters ask us if there is any advantage to being classified as a First Time Buyer and there are some small benefits.

When looking at mortgage products available to First Time Buyers there are some incentives. This could be a reduction in the lenders arrangement fee for setting up the mortgage. A lenders arrangement fee is now typically £999 and a lender may offer a first time buyer a reduction in this fee to around £499. The lender may also offer a free valuation although this is usually not taken up with Scottish mortgage applications as the Home Report provided and prepared by the Seller includes a Single Survey that has been carried out by a Chartered Survey and it is this survey that is used by lenders providing mortgages for Scottish Property Purchases. Generally speaking, you may receive a small decrease in fees when applying for a First Time Buyer Mortgage but any savings would be minimal when measured against the same mortgage product for a Home Mover.

First Time Buyers seeking mortgages may also be given preference on certain property types available for sale from various Organisations, New builders and special social projects. This would include Shared-equity purchases from New Build companies and from certain Housing Associations and Shared-ownership also from Housing Associations. There is also the government sponsored schemes including LIFT and New Buy or Mi New Home and Golden Share that is attractive to but not exclusively for first time buyers applying for their first mortgage. The New Buy/Mi New Home scheme can allow buyers to purchase a new build property up to 95% Loan To Value which can make it easier for a first time buyer to purchase a new home as they only need a 5% deposit.

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