Are you ready to step into your first home? Did you know that the average age of first-time buyers in the UK has hit a record high of 30 years? Securing mortgages has become more challenging than ever, making accurate information crucial.
Can Self-Employed Individuals Obtain a First-Time Buyer Mortgage?
The path to purchasing your first home can seem daunting, especially when you’re a contractor. You might have been discouraged by people saying you won’t qualify for a mortgage. While it may pose additional challenges, don’t let this dissuade you. What you need is professional guidance, and that’s where Mortgage Knight steps in.
Ways to Improve Your Chances of Securing a Contractor First-Time Buyer Mortgage:
Consult a specialist advisor. Explore available government schemes, such as Help to Buy. Be selective in your search – not all mortgage providers will suit your needs! Consider adding an extra £100 to your deposit if you’re on the cusp of a deposit band. Keep your credit utilization low—avoid maxing out credit cards or overdrafts. Rein in spending before making your application. Avoid applying for additional credit just before your mortgage application. Ensure you’re registered to vote, if not already. Check for any errors on your credit report.
Expert Guidance for First-Time Mortgages:
One common mistake many contractors make is approaching banks for their first-time buyer mortgage. Getting a bank loan in such instances can be tough, leaving you feeling discouraged and caught in a maze of requirements.
Working with us means you’ll communicate with a specialist contractor mortgage advisor. They comprehend the unique nature of your work and precisely know how to present your circumstances to a mortgage lender, assuring them of your stable income and credibility. They’ll match you with the best mortgage providers based on your circumstances, increasing your approval chances.
Factors considered in a mortgage application include:
Employment status and income Existing debts Outgoing expenses Credit rating Savings for a deposit Required mortgage size
How We Improve Your Chance of Mortgage Approval:
Our standout service involves presenting you to lenders based on your gross contract value. This approach acknowledges that traditional accounts may not reflect your actual earnings accurately. Unlike standard mortgage advisors who rely on salary and dividends, we recognise the limitations of this approach and use your gross contract value, ensuring your accounts or payslips aren’t necessary.
First-Time Mortgages for Contractors:
We assist various types of contractors, including those under umbrella payment structures. Whatever your circumstances, our experience and connections ensure you have the best chance of securing a favourable mortgage rate.
Mortgage Lenders:
We work with an array of lenders, including:
Accord Bank of Ireland Barclays Bluestone Clydesdale Coventry Halifax HSBC Kensington Kent Reliance Leeds BS Metro Bank Nationwide NatWest Scottish Widows Virgin Money
Monthly Mortgage Repayments:
Your monthly repayments depend on the type of mortgage you choose. Explore our mortgage types for better insights.
Support at Every Step:
From your first inquiry to completing your mortgage, we stand by you. Many aren’t aware of contractor mortgages, but they’ve existed for decades. We’re well-versed in this niche and can guide you through the process clearly and concisely, keeping you informed at every turn. For more information, explore our First-Time Buyers Guide for Contractor Mortgages and use our mortgage comparison tool.
Call us today on 02081437777 to receive a comprehensive quote tailored to your contracting circumstances. We’re here to assist you!
Trusted Mortgage Experts for First-Time Buyers
How Much Deposit Will You Need?
When you’re buying your first home, the size of your deposit can significantly impact your mortgage options and the rates you’re offered. Here’s a breakdown of what to consider:
Minimum Deposit:
You’ll typically need at least 5% of the property’s price. This means you’ll have a high loan-to-value (LTV) ratio of 95%, which can limit your choice of mortgage deals and might lead to higher interest rates.
10% Deposit:
Saving 10% gives you access to a wider range of mortgage products and better rates. It reduces your LTV ratio and shows lenders you’re a lower-risk borrower.
15% Deposit:
With a 15% deposit, you’ll improve your chances of securing even more competitive mortgage rates and terms. This deposit size indicates to lenders that you have a strong financial position.
20%+ Deposit:
A deposit of 20% or more not only opens doors to the best rates available but also significantly reduces the amount of interest you’ll pay over the life of the mortgage. It lowers your LTV and makes you a more attractive borrower.
No Deposit:
While rare, it’s sometimes possible to buy a property with no deposit by taking out an additional unsecured loan. However, this approach requires proving you can manage two loan repayments and may involve stricter conditions.
Can First-Time Buyers Get a Mortgage?
Absolutely! While some lenders may be cautious about lending to first-time buyers, many are eager to help you get started on the property ladder. As long as you meet their basic criteria—such as having a steady income, a decent deposit, and a good credit history—you’re in a strong position.
In fact, being a first-time buyer can work in your favour. Without a property to sell, you can make swift decisions and move quickly, making you an attractive option for sellers. At Mortgage Knight, we’re here to guide you through every step and ensure you secure the right mortgage for your new home.
Choosing the Right Property for Your Mortgage
When you’re ready to buy a property, it’s crucial to consider both the type of property and its condition. Lenders are more likely to support mortgages for homes in good condition with standard construction.
However, properties in disrepair, non-standard constructions, or those with thatched roofs and listed status might pose challenges.
Some niche lenders are open to these types of properties, but it’s essential to know the specifics before applying.
Calculating Your Monthly Mortgage Payments
Your monthly mortgage payments will depend on a few key factors:
Amount Borrowed
The more you borrow, the higher your monthly repayments.
Interest Rate
Higher rates will increase your monthly costs.
Mortgage Term
A longer-term reduces monthly payments but increases the total amount of interest paid over the loan’s lifetime.
Typically, a standard mortgage term is 25 years, though many lenders offer terms up to 35 years. While a longer term means lower monthly payments, it also means you’ll pay more interest in total.
Using a mortgage calculator can help you determine what’s manageable, but if you prefer expert assistance, our brokers at Mortgage Knight are here to guide you through every step.
Why We Are the Top Choice for First-Time Buyers
Thousands of first-time buyers trust us each month for a reason. At Mortgage Knight, our commitment is to provide a seamless, cost-effective service, helping you secure the best mortgage deal without any hidden fees or extra charges.
100% Free Consultation
No hidden fees; we offer free consultation & guidance, so our success depends on finding you the best deal.
Low Deposit Options
Access a range of mortgage products and schemes with deposits starting from just 5%.
Dedicated Support
Enjoy a single point of contact who knows your application inside out and is with you every step of the way.
Frequently Asked Questions
For most mortgages, you’ll need at least 5% of the property’s purchase price as a deposit. Saving more, like 10% or 20%, can give you access to better mortgage rates and terms. Some schemes, like Help to Buy, may allow you to put down less.
Even with a poor credit score, you might still be able to get a mortgage. It’s important to work on improving your credit score before applying. Specialist lenders and adverse credit mortgages are available for those with less-than-perfect credit histories.
Your borrowing amount depends on your income, outgoings, debts, and credit history. Lenders typically multiply your annual income by 4 to 5.5 times. Use a mortgage calculator to estimate your borrowing potential or consult with a mortgage broker for tailored advice.
Mortgages for properties in disrepair or with non-standard construction can be challenging. Mainstream lenders might be hesitant, but niche lenders may offer suitable deals. We can help you find the right lender and explore the best options based on your property’s condition.
The mortgage process usually takes from 1 day to 2 weeks if all documents are in order and valuations are completed promptly. Having your paperwork ready and responding quickly to requests can help speed up the process.
In addition to the deposit, you should budget for stamp duty, solicitor’s fees, mortgage arrangement fees, and valuation fees. Don’t forget to include insurance costs to protect your new home and investment.
1. How much deposit do I need to buy my first home?
For most mortgages, you’ll need at least 5% of the property’s purchase price as a deposit. Saving more, like 10% or 20%, can give you access to better mortgage rates and terms. Some schemes, like Help to Buy, may allow you to put down less
2. What if I have a poor credit score?
Even with a poor credit score, you might still be able to get a mortgage. It’s important to work on improving your credit score before applying. Specialist lenders and adverse credit mortgages are available for those with less-than-perfect credit histories.
3. How do I know how much I can borrow?
Your borrowing amount depends on your income, outgoings, debts, and credit history. Lenders typically multiply your annual income by 4 to 5.5 times. Use a mortgage calculator to estimate your borrowing potential or consult with a mortgage broker for tailored advice.
4. Can I get a mortgage on a property that needs repairs?
Mortgages for properties in disrepair or with non-standard construction can be challenging. Mainstream lenders might be hesitant, but niche lenders may offer suitable deals. We can help you find the right lender and explore the best options based on your property’s condition.
5. How long does it take to get a mortgage?
The mortgage process usually takes from 1 day to 2 weeks if all documents are in order and valuations are completed promptly. Having your paperwork ready and responding quickly to requests can help speed up the process.
6. What are the additional costs of buying a home?
In addition to the deposit, you should budget for stamp duty, solicitor’s fees, mortgage arrangement fees, and valuation fees. Don’t forget to include insurance costs to protect your new home and investment.
