Buying your first home is a big milestone, and figuring out if the right time to buy your first home can be a little confusing. After all, you have to think about interest rates, deposits, and the housing market. 

You also want to think about government schemes, financial support, and even lender options, so where do you start when thinking about buying your first home? Here’s the lowdown.

Interest rates

Interest rates have an impact on how cheap (or expensive) it is to borrow money. It’s essentially the cost of borrowing. If interest rates are high, then it will cost you more. 

Check out our article below for a deeper dive into mortgage interest rates:

It's worth understanding this so that you can choose the right mortgage for your needs. Do you want stability or flexibility? For example, going for a fixed rate mortgage will protect you against any interest rate rises while a tracker mortgage will fluctuate with the market, as interest rates go up and down. 

Once you have an understanding of that, it’s important to consider how you’re going to get your foot in the door for your first home. Where is your deposit coming from? If you don’t quite have enough, there are a few different schemes and incentives available to help you, though you can still buy a house with a small deposit.

Would you borrow from the Bank of Mum and Dad?

Have you thought about asking for a little help from Mum and Dad

If you’re in a position where you can ask your parents for help buying your first home, then it’s worth having the conversation. They can give you what is called a gifted deposit, which won’t count as debt when your mortgage adviser carries out their affordability checks. 

If they can’t give immediate financial support, you could ask them to be a mortgage guarantor.

Guarantor mortgage

Your friends or family members can opt to be your mortgage guarantor. They can use either their own savings, or their own property (if they own one), to offset against your mortgage. 

Your guarantor takes on some of the risk of the mortgage for you, because if you miss any repayments, your guarantor could risk losing their savings or their home.

More lender options

Many banks and building societies have updated their products to be more inclusive, in order to appeal to a wide range of customers. 

Many now cater to self-employed people and contractors, with criteria that take into account their unique income streams. This is a game-changer for many aspiring first home buyers. Speak to your adviser about what options may be available to you.

Speak to a professional

Buying your first home can feel like a complex process, but you don’t have to go it alone. A mortgage adviser can help you navigate your options, figure out your budget, and handle the application from start to finish. 

Are you ready to take your first step onto the property ladder? Talk to a professional today to get started!

Important information

Your home may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

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