Buying your first property and choosing the right mortgage can be rather daunting, so do contact us and we can advise you on the mortgage options available to you. In the meantime, we hope you find the following information useful.
The amount of mortgage you can get depends on your income. As a rough guide the usual multiples are around 3-4 times the gross salary of borrowers. These multiples do vary from lender to lender and lenders are more generous if your deposit is at least 25% so it is worth talking to us to find out what is available.
Once you add to this the amount that you can afford to pay as a deposit, you have the amount you can pay for your first property.
Some lenders offer very good deals for first time buyers and a minimum deposit of 10% is required. It is also worth remembering the additional costs, on top of your deposit and mortgage that you will be expected to pay.
For example, you will have to pay stamp duty, which is 1% of the purchase price for properties between £125,000 and £250,000, then 3% up to £500,000, then 4% between £500,000 and £1,000,000 and then 5% on £1m+. For a property below £125,000, there is no stamp duty to pay or if you are a first time buyer there is no stamp duty to pay on purchases below £250,000.
You will have to pay for the survey and the valuation on the property, plus solicitor’s fees. You may also have to pay an arrangement fee for the mortgage and a Higher Lending Charge – which is insurance for the lender for you defaulting on your payments when your property is worth less than the loan
