As a first-time buyer, putting a
first foot on the property ladder
is an exciting prospect, but can
also be a nerve-wracking
experience. Before finding a
property, it is important to
recognise what is affordable, as
well as understanding what
lenders will allow you to borrow.
Unless you are able to buy a home
outright, a property purchase will most
likely be made up of a deposit and a
mortgage for the rest- meaning that the
buyer will need to borrow money from a
mortgage provider. Different providers
offer different rates and types of
mortgages, each of which comes with
interest on the money borrowed.
It is useful to have a decision in
principal when looking for a new home.
Many sellers and estate agents won’t
accept an offer without one. This is an
initial agreement that (in principal) the
lender is prepared to grant you a
mortgage, and a qualified declaration of
how much they may let you borrow.
When applying for a mortgage, there
are several tasks to complete which could
encourage better results, including the
acceptance of an application or better
interest rates. They include;
• Electoral role – It could negatively
impact your credit score if you aren’t
on the electoral role
• Check your documents are all in your
correct name with your up to date
address on. Lenders can ask for
anything and everything to satisfy their
underwriting requirements so having
access to accurate documents is
essential.
• Review your credit file. Use an online
credit reference agency to ensure your
credit history is correct. It’s easy to
forget about any ‘black marks’ on a
credit file – which could result in you
being declined for a mortgage.
• Get rid of bad habits – when you apply
for a mortgage, lenders will look at
your income and your outgoings. This
may involve you needing to make small
financial adjustments to demonstrate
that you are a safe spender.
• Proving income – pay slips and bank
statements from the last three months
are usually required when applying for
a mortgage. If you are self-employed,
you will need copies of your tax
returns and business accounts.
• Aim to avoid missing payments or
paying late by setting up direct debits.
• Try to keep your financial position as
stable as possible in the months
running up to a mortgage application.
Avoid opening new accounts and
taking out new credit facilities.
To support first time buyers in
achieving the important milestone of
stepping onto the property ladder, the
government recently introduced a new
mortgage guarantee scheme. Launched in
April 2021, the scheme assists first-time
buyers with small deposits by protecting
lenders if the borrower fails to pay. This
will increase the availability of 95% loanto-value mortgage products, enabling more buyers to access mortgages without
the need for prohibitively large deposits.
The COVID-19 pandemic led to a
reduction in the availability of high loanto-value (LTV) mortgage products,
particularly for prospective homebuyers
with only a 5% deposit – leaving many
unable to get onto the housing ladder.
The government announced the
mortgage guarantee scheme, supporting
the next generation of homebuyers. The
95% mortgage scheme will run for 18
months until December 2022 and
applicants must have a regular income, a
good credit rating and show that they can
afford the monthly mortgage repayments.
Bradley Hall’s mortgage team will
unlock the best deal possible for their
clients whilst also managing the
application from start to finish, collecting
and analysing all of the required
information including credit history,
deposit size, preferred monthly
repayments and pair you with a tailored
and bespoke solution which meets all of
your needs.
Our expert mortgage team has
scoured the market to find the best
example deals for low deposit buyers*
*Accurate at the time of publishing and subject to change.
