Description: Get a general idea about the different types of first time buyer mortgages available in the United Kingdom.
Obtaining a first time home buyer mortgage is the initial step on the real property ladder in the United Kingdom. You should determine how much you can borrow. It’s important to keep in mind that your first time home buyer loan is a big home mortgage loan that you would possibly pay back throughout an extensive period. For this opportunity, you have responsibilities associated with repayments and obviously, there would be other costs.
You can always talk to a home mortgage lender directly. However, a reputable home loan broker can help you get a better deal since they have a lot of expertise on first time buyer loans. They can also give you valuable home buying tips.
You can also talk to an independent mortgage advisor who can help you clear your confusions. For getting first time buyer loan advices, you don’t need to make any commitment to any lender. An advisor or broker would have the information about the most attractive first time buyer loan offers in the country.
Given below are some popular types of first time buyer home loans:
Cash back first time buyer mortgage
When you buy the property, you get some money from the lender to pay for costs such as stamp duty and other occupancy costs.
Guarantor first time buyer loan
If you’re unable to make your loan payments, your parents can make it for you.
Joint first time buyer mortgage
Here you can collaborate with a friend or family member to borrow a higher amount and divide the costs. However, you have shared loan payment responsibilities.
First time buyer loan on the basis of borrowing ability of parents
Here you can borrow a higher amount since your parents can assist you with the payments.
Family offset first time buyer mortgage
The savings interest of your family is counterbalanced against the interest of your own loan.
High Loan-to-Value first time buyer loan
Very few lenders offer these types of loans. You can borrow up to 130% of the property value. This suggests you began with negative equity but all your expenses were compensated.
Graduate and professional first time buyer mortgage
Bigger amounts are offered to those who are expected to have a promising career, signifying they would raise their income in the near future.
Renting a room first time buyer loan
If there’s an extra room in the property, the income from rent is taken into consideration when determining how much can be lent to you or how simple it is for you to pay back.
Shared ownership first time buyer mortgage
If you are the owner of the portion of a property, you can pay rent to the co-owner (normally a housing association) and take out a loan for the portion you are buying.
Rent to buy first time buyer loan
Here how much you have been paying as rent is considered as the amount you can manage to pay back with a loan. It shows affordability.
Shared equity first time buyer mortgage
In return for a home mortgage loan and a top up loan for buying your first home, you would need to sacrifice some the growth in your property value to the top up loan provider at the time of selling it.
First time buyer loan with extended terms
Here you begin with a repayment term of up to 40 years. The monthly payments become more reasonable but you would have to pay more on interest if you didn’t cut down the loan term where you’re able to afford the bigger monthly payments.
