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First-Time Buyer Mortgages
Government support for first-time buyers
The housing market can be daunting for first-time buyers, but there is government support for those new to the property ladder. This is aimed to help you to get on track financially and put you on the path to your happy ever after.
Help to Buy scheme
If you have saved a 5% deposit when applying for a mortgage, you may be eligible for the government’s Help to Buy scheme. The government loans a further 20% (40% for London) towards your final deposit for a new-build home costing up to £600,000. This loan will remain interest-free for the first five years, with the sixth year seeing an interest rate of 1.75% added to the repayments. This interest rate will then see an addition of 1% and will be subject to inflation.
Help to Buy ISA
The government is also offering a Help to Buy ISA, which could see a savings top-up of between £400-£3,000 depending on the initial pay-in.
Shared ownership
A shared ownership mortgage allows you to buy an agreed percentage of a property. The remaining share of the property would typically be owned by a housing association or management company. In this instance you would pay an agreed rent on the percentage of the property you do not own in addition to your mortgage payments.
Mortgage types
Types of mortgages available to first-time buyers include:
- A fixed-rate mortgage gives fixed monthly payments for, typically, between 2-5 years, depending on your circumstances and agreement with the lender. You will benefit if the interest rate rises, but not if it falls. This type of mortgage is often better for first-time buyers as it offers more security.
- A tracker mortgage is aligned with a base rate, typically the Bank of England’s base rate, plus a pre-agreed mark-up. Your payments will rise and fall in line with this base rate. Those looking to remortgage from a fixed rate to a variable or tracker may benefit from better rates, but will have less security.
- A discounted rate mortgage offers a discount on a certain interest rate, most commonly a lender's Standard Variable Rate. The discount can be for an introductory term of two, three or five years, or it could even be for the entire term of the mortgage (a lifetime discounted rate)
- A variable rate mortgage gives an interest rate stipulated by the lender. You would normally revert to this rate at the expiry of a fixed term, tracker or discount period. If your mortgage has reverted to a standard variable rate, there are normally lower cost solutions available.
Your property may be repossessed if you do not keep up repayments on your mortgage.
This firm usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.
Why Aston & Co?
At Aston & Co we have the experience and the know-how to help first-time buyers find the best mortgage deal to suit you and your budget. Our friendly and professional advisors are on hand to guide and support you in your choices. Contact us today to discuss your needs and pave the way to your happy-ever-after.
