One of the most important achievements in our lives is when we become owners of our own house. Being a homeowner brings with it the independence you need when you want to start a family and with it, the necessary versatility to invest in your property precisely in the way you desire. Gone are the times when you had to let your landlord know if your bathroom water pipe had a small leak, or the moments of uncertainty about your right to paint your own garage door.

We all know that being a homeowner brings with it a host of responsibilities but also countless benefits that most people are eager to have. Unfortunately, the cost of owning property in the UK has risen steadily in recent years, with the average cost of a house now over £250,000 . So, for most young people who want to become homeowners, the mortgage option is the only viable way to own their dream home. But it has to be said that the UK government is encouraging quite strongly the right of young citizens to own their own home, and first time buyer mortgages present some major incentives for young people, which we will try to outline in the following paragraphs

Benefits of First Time Buyer Mortgages

Whether we're talking about first time buyer mortgages or the resources available for a buy to let first time buyer, the UK government is encouraging the right of young citizens to become home owners. Government schemes such as the First Home Scheme, where the price of newly built homes is reduced by up to 30% for first time buyers, or schemes such as Help to Buy, where the UK government can help you with 20% of the deposit required for your mortgage, can be real solutions for the start of your homeownership journey.

The conditions for your first mortgage may differ from one institution to another, but the minimum deposit that you must put down on most https://ukmoneyman.com/first-time-buyer/ first time buyer mortgages is 5%, although the vast majority of people choose to put down a minimum of 10%. Other requirements for the success of your mortgage application are represented by having a stable income that allows you to pay the monthly payments and interest rate, and having a satisfactory credit score. To qualify for first time buyer mortgages, you must also be 18 years of age or older and have no other property beforehand. Although these conditions may differ slightly between lenders, some of them maybe even accepting your application if a significant period of time has passed since you were a homeowner.

What Are the Advantages of the Help to Buy Scheme?

Through the Help to Buy affordable housing scheme, the UK government will basically give you a 0% interest loan for the first five years after you buy your property, in order to put down the deposit needed for obtaining a mortgage. There are a few conditions though. First of all, the house you buy must be new and the builder you buy it from must have a contract with the UK government for membership in the affordable housing scheme.

Secondly, the 20% received from the government remains interest-free only if you manage to repay the full amount of the loan within the first five years after the mortgage is granted. But why can these programs benefit you? Because basically, by putting together the 20% from the government and the 5% from your own pocket, you will place a deposit of 25% for your First time buyer mortgages. In this way, the monthly rate you will have to pay will be much lower, as will the interest rate.

What if I Am a Buy to Let First Time Buyer?

You may not necessarily want to buy a house to live in, but instead, you may want to own a house that you can rent out for additional income. Is it therefore possible to qualify for buy to let first time mortgage if I don't have another house in my name? In short, yes, but the conditions required for the approval of the loan application are a bit stricter.

The percentage of first time buyers in 2021 accounted for 34% of all homebuyer transactions. But of these, only a small percentage were a https://ukmoneyman.com/first-time-buyer-buy-to-let/ buy to let first time buyer . Why? Firstly, the deposit required to obtain a mortgage as a buy to let first time buyer stands at a minimum of 25%, without benefiting from the affordable housing programs implemented by the UK government. At the same time, you will need to have a stable annual income, which is a little higher than you would need with a normal mortgage.

What Aspects Should a Buy to Let First Time Buyer be Interested in?

It is quite unusual for a person who does not have a residence in his or her name to seek to purchase a house that he or she only rents, without having the right to live in it. But in many ways, this investment can make a lot of sense. If you are the kind of person who lives in a multi-generational household, or if you enjoy a rent that is financially favorable to you, or even if you simply enjoy the freedom of not being tied to a single property, then perhaps this kind of investment may be a good alternative for you.

But you should take into account that the approval rate for buy to let first time buyers is lower than normal and your credit conditions may differ quite a lot from one bank to another. Thus, it would probably be a good investment for you to use the services of a mortgage broker who will take care of the documentation necessary for the success of your mortgage request and who will present you with the best credit conditions available on the market.