WHAT IS FIRST TIME BUYER ?
As the name suggests, First Time Buyer Mortgages are for people who have never owned any piece of property in their life. This type of Mortgage requires some regulations that are different from the mainstream Mortgage in the UK. In the majority of the cases of First Time Buyer Mortgages in UK, it is required to pay a minimum of 5% of the value of the property in the form of a deposit. Such buyers are also offered some discounts, rebates or incentives. In many cases, this deposit can go up to 10% also but a deposit rate is mostly between 5-10%.
In the case of First Time Buyer Mortgages, the borrower is allowed to borrow somewhere between 20-40% of the price of the purchase. This percentage is considered an interest-free equity loan and the borrower is not bound to pay interest for the first five years on this equity loan.
In the United Kingdom, a person who has never owned a piece of property in his/her life is considered a First Time Buyer in UK and who wishes to buy a property for the purpose of a primary residence. In many cases, remortgaging and buy-to-let investors are also classified as First Time Buyers in UK. Generally, the lenders allow somewhere between 4-6 times the annual salary of the borrower as a Mortgage amount that can be sanctioned.
Benefits of being a First Time Buyer
There are certain benefits of being a First Time Buyer in United Kingdom and applying for the mortgage under the same conditions. A number of financial benefits are given to the First Time Buyers and also, and they are more preferred to the lender. It is to be noted that a person cannot qualify to be a First Time Buyer twice. It doesn’t matter if the previous property was under joint ownership, commercial, private, etc. Once a person owns a property, he/she cannot avail of the perks of being a First Time Buyer.
