First time buyers mortgages Kensington, London
Helping first time buyers get onto the property ladder in London
Getting on the property ladder as a first time buyer can be extremely challenging. Here at AA Mortgage Gateway London we have experts on hand that can guide and advise you on the best options for your current circumstances. First time buyers have many routes they could take, and we can help you to find what is most appropriate.
Before looking for your first home, you will need to know how much you can borrow. Nearly all banks and building societies assess borrowers based on your incomings and outgoings plus future interest rate rises and your credit score before they decide how much they can lend a first time buyer. Mortgage finance might be turned down or charged a higher interest rate if you have ever had bad debt issues in the past.
It might speak for itself but with mortgage finance the more you have for a deposit the better the mortgage finance deal you can likely get. These days a very small number of mortgage lenders will offer a 100% mortgage for the whole property value, and even the ones that do have a much higher rate of interest than the lowest percentage mortgages.
The percentage that is described in mortgage finance is called ‘LTV’ which stands for ‘loan to value’. The most that standard banks and building societies would normally lend would be 95% LTV, meaning you would need a 5% deposit. To receive the best rates you will need to have a 10% – 40% deposit of the property value.
Although there are many mortgage deals they all fall into two main brackets – variable rate and fixed rate.
First time buyers tend to favour the fixed-rate mortgage because it allows them to budget their finances each month, leaving them not needing to worry about fluctuating interest rates. You can typically fix your mortgage for two, three or five years. But some lenders offer long-term fixes of 10 years or more. Once your fixed deal has come to an end we recommend shopping around for another good deal.
There are three types of variable rate mortgage- standard variable rates (SVR), tracker mortgages and discounted rate mortgages.
Remember, variable rates can change at any point but usually do so if the Bank of England puts its base rate up. When that happens, variable rates will probably rise while a fixed rate will remain the same.
Don’t forget to factor fees into your cost calculations. Most lenders charge an arrangement fee for your mortgage, which could be £1,000 or more. Some also levy a non-refundable booking fee of several hundred pounds.
Call us to book an appointment so that we can discuss your options and find the most suitable mortgage for your needs!
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