Mortgage Services for First Time Buyers

Quick Links : Help with Mortgage Applications  |  Options if you don't have a 10% deposit

Is this your first home? Then welcome, first time buyer...

Mortgage Advice for First Time Buyers

Buying a house for the first time has become a challenge. As soon as you mention you're looking to buy your first home, suddenly everyone around you is an expert, full of well intended advice and guidance which may eventually become somewhat confusing.

As much as you may trust or care for this advice, it's important to speak with a qualified adviser.

Our advisers have spent many years in the property industry helping people just like you to conduct probably the most expensive transaction of your life. The WestBerks Properties Financial Adviser will listen to you and, cutting through the jargon, will explain the purchase process, potential pitfalls, and much more besides.

The Mortgage Application - we're here to help!

When applying for a mortgage, lenders will need to know about:

  • your earnings
  • outgoings
  • the value of the property you want to buy
  • your deposit
  • and your credit history

Carefully preparing a Budget Planner, with the assistance of our expert advisers, is an invaluable part of the process.

Unlike comparison websites, we have access to all mortgage lenders. We compare the whole range of mortgage products available on the market giving you peace of mind and saving you the time of shooping around.

The adviser will explain the different types of mortgages on offer and guide you through the maze of mortgage rates to find you the best deal for your circumstances.

Contact us or call 01635 871 087 if you would like to discuss your mortgage options.

No 5% deposit? Don't worry, there are alternatives

We appreciate that securing a mortgage these days is harder than it used to be, especially for first time buyers. Many circumstances have made it more and more difficult to get onto the property ladder.

Today you will need a minimum of 5% deposit of the purchase price before a lender will consider you. However, if you don't have the 5% deposit to put down, there are alternative options for you to consider, especially If your savings are limited or your income is not sufficient to obtain the level of mortgage that you require, but you can afford the mortgage budget discussed.

If you don't have a 5% deposit, you have 4 options:

  1. Guarantor Mortgage
  2. Buy With Friends / Family
  3. Shared Ownership / Shared Equity
  4. Government Help to buy schemes

1. Guarantor Mortgages

A 'guarantor' is someone who is willing to guarantee your mortgage payments in the event that you are unable to make or fail to make your repayments.

If this happens, they are liable to cover the repayments for you. It is in this situation that the various types of insurance discussed later, can be of enormous benefit as your guarantor could be at a risk of losing their home if you and they are unable to pay the monthly repayments.

A full budget analysis will be done with the guarantor to ensure their ability to make repayments and at all times our Advisers will recommend the guarantor speak with a solicitor to ensure they fully understand the implications of such help.

Contact us or call 01635 871 087 to find out more about Guarantor Mortgages.

2. Buying with friends or family

If your salary isn't large enough to cover the mortgage you need, by combining your income with the income of a close friend or someone you know who has a similar predicament as you, why not join forces.

Doing so will help share the financial cost and you should be able to afford a larger property or a better location. Our Advisers will recommend you both obtain legal advice before entering into a formal agreement to ensure you both understand the implications.

Contact us or call 01635 871 087 to find out more about buying with friends or family.

3. Shared ownership / Shared Equity

Housing associations operate shared ownership schemes where the association owns part of the property and you take the mortgage on the rest of it.

As well as paying a mortgage on part of the property, you also pay rent for the part that belongs to the housing association. Shared ownership makes home ownership more affordable.

You might buy a 25%, 50% or 75% share in your home. The bigger share that you purchase, the less rent you will have to pay. When you can afford to do so, you can buy more shares until you own your own home outright, in a process known as ‘purchasing tranches’ or 'stair casing'.

The other share in a shared ownership property is usually owned by a housing association and as such, priority is generally given to people on local authority or housing association waiting lists. However, with the number of new builds increasing, shared ownership is now becoming more open for all buyers.

Contact us or call 01635 871 087 to find out more about Shared ownership / Shared Equity.

4. Government Help to buy schemes*

‘Help to buy’ is the government’s latest scheme to help people on to the property ladder and replaced the 'Firstbuy' scheme from 1st April 2013.

Aimed at helping ‘all’ home buyers across England, to purchase a new-build or secondhand home with the assistance of low-deposit mortgages.

The government have two schemes available, the ‘Help to Buy Equity Loan Scheme' where the purchaser needs only a 5% deposit and the government offer an equity loan of up to 20%, and the ‘Help To Buy Mortgage Guarantee Scheme' where the purchaser needs only a 5% deposit and the government guarantee the lender giving you a 95% mortgage.

Download the Homes & Communities Agency's Help to Buy Buyer's Guide [PDF].

Option 1: Help to Buy Equity Loan Scheme

The government will lend buyers up to 20% of the full value of a new build home. The remaining purchase price of at least 80% will need to be funded by a mortgage (including your 5% deposit). The government loan is interest free for the first five years.

The key features of the scheme are:

  • The scheme is available to all home buyers, not just first-time buyers
  • There is no household income limit
  • You can purchase a new-build property with a maximum value of up to £600,000
  • You will need a minimum 5% deposit to qualify
  • You will need to meet appropriate tests to ensure you can repay the mortgage, as well passing your chosen mortgage lender’s credit and affordability checks
  • The property purchased must be your only residence - you cannot use this scheme for Buy to Let investments.

How do I find out which developers offer Help to Buy properties?

Registered builders will make it clear in their advertising if Help to Buy homes are available on their development sites. You can also contact us directly on 01635 871 087.

How do I apply for a Help to Buy Equity Loan?

You do not need to register or complete a self-assessment form to apply. You should:

  1. Find a suitable new-build property from a developer registered to offer Help to Buy
  2. Complete a Help to Buy Property Information Form [PDF] & relevant Reservation Form provided by the developer. Need help filling in this form? Please contact us.
  3. The developer will submit both forms to Catalyst Housing
  4. Catalyst Housing will issue an 'Authority to Proceed' document - NOTE: we will not apply for a mortgage prior to receiving this document, only carry out the preliminaries
  5. Your Authority to Proceed will then outline the next steps. Please ensure you have read the Help to Buy Buyers Guide available on request. Please contact our advisers.

Example of an Equity Loan used to purchase a £200,000 property

Cash Deposit £10,000 5%
Equity Loan £40,000 20%
Your Mortgage £150,000 75%
Total £200,000 100%

Equity loan fees

You won’t be charged loan fees for the first 5 years of owning your home. In the 6th year, you’ll be charged a fee of 1.75% of the loan’s value. After this, the fee will increase every year.

The increase is worked out by using the Retail price index plus 1%. Your Help to Buy agent will contact you before the fees start, to set up monthly payments with your bank. You’ll also be sent a statement about your loan each year. Fees don’t count towards paying back the equity loan.

Contact us or call 01635 871 087 to find out more about the Equity Loan scheme.

Option 2: Help To Buy Mortgage Guarantee Scheme

The Help to Buy Mortgage Guarantee scheme can help you buy a newly built home or an existing property with a deposit of as little as 5%.

This scheme is not administered via Help to Buy Agents, you should contact us and will check to see that you qualify and then advise on those participating in the scheme and more information.

How it works:

The scheme works by offering lenders the option to purchase a guarantee on mortgages where a borrower has a deposit of between 5% and 20%.

Eligibility and key features of the scheme:

To qualify for this scheme, you must pass lender affordability checks and have no history of difficulties in meeting debt payments. In order for your mortgage to be eligible for the mortgage guarantee scheme:

  • it must be a residential mortgage, so you will be living in your house, not renting it out
  • the property must be in the UK and the purchase value must be £600,000 or less
  • the mortgage must be taken out on a repayment basis, rather than interest-only
  • the mortgage must be to buy your only property, so you cannot have an interest in any property, anywhere in the world
  • the mortgage cannot be for a shared equity or shared ownership purchase

How to apply:

You can apply for a mortgage guarantee through WestBerks Properties Ltd who will get an agreement in principle with participating mortgage provider. Please call 01635 871 087 or Contact us for more information.

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