First time buyers

Helping you take those all important first steps

Buying a home is likely to be the largest financial commitment you ever make, and it is vital that you have the right mortgage. When it is your first step on to the property ladder, the choices can sometimes be daunting.

With so many mortgage lenders offering so many products, Cooper Associates can guide you through the complexity of today’s mortgage markets. We provide a bespoke mortgage recommendation that is not only suitable for your individual needs, but also as competitive as it can be.

Watch our first-time buyers, Harriet & Stuart talk about their experience of buying their first home through Cooper Associates.

We offer a comprehensive range of mortgages from across the market and have access to exclusive rates not always available on the high street. Our level of service, our size, and our access to market-leading products means we are perfectly placed to find the perfect mortgage for you.

What exactly is a mortgage?

A mortgage is simply a long term loan taken out to buy a property or land. The term of the mortgage will have an impact on your monthly mortgage payments.

The loan is ‘secured’ against the value of your property until you have finished paying it off. If you do not make your mortgage payments, and the mortgage falls into arrears, the mortgage lender is within its rights to repossess the property and sell it to repay the money you borrowed. Remember, a mortgage is a legal agreement. Due to this, it is so important to ensure whatever you borrow is affordable both now and in the future.

Our mortgage advisers will discuss your borrowing options before you start your property search.

Need some extra guidance?

Please find below our helpful guides which will provide you with further information.

How do I repay my mortgage?

The money you borrow from your mortgage lender is known as the capital. Your mortgage lender will then charge you interest on the capital borrowed. The longer your term, the more interest you will pay over the duration of your mortgage.

There are different options available to repay your mortgage.

Interest only

An ‘interest only’ mortgage involves you only paying the interest on the capital you have borrowed. The capital is repaid usually by a suitable ‘repayment vehicle’ agreed with the mortgage lender, for example, with regular ISA savings made over the agreed term of the mortgage. You should be aware however, that many lenders do not offer interest-only mortgages anymore due to concerns over borrowers not being able to repay their mortgage at the end of its term.

Repayment

A ‘repayment mortgage’, also known as a capital and interest mortgage repays some of the capital you owe with each mortgage payment, and some of the interest being charged on the capital you owe to your mortgage lender. Providing you do not miss a mortgage payment, the mortgage is guaranteed to be repaid by the end of its term.

In both instances, the mortgage lender has security of the property.

Our recommendation for first-time buyers is usually a repayment mortgage.

What size deposit do I need?

When buying a property, you will need to pay a deposit, or a sum of money towards the value of the property you are buying.

Generally, you will need a minimum of 5% of the purchase price of the property you intend to buy. The remainder of the purchase price (the gap between your deposit and the price you are buying the property for) is met by a mortgage.

The larger the deposit you are able to provide, the less of a risk you present to a mortgage lender. Due to this you are likely to be offered a more attractive mortgage deal and the less you are likely to have to pay back in the way of interest.

Paul Bruford
Ask the expert
Paul Bruford | Mortgage Adviser

What type of interest rates are there?

Lenders offer different ways in which they charge interest. Your mortgage adviser will discuss the various options with you to establish the most appropriate for your circumstances.

There are many different products but generally they will fall into three categories.

Fixed Rate

A fixed rate is a rate of interest you pay for a set period of time, this may be two, three or five years although can be longer. Your mortgage payment will not change during the time you are fixed in for, which allows you to budget effectively. If interest rates rise, you will be protected against any increases and your mortgage payments will remain the same. However, if they should fall, you will not benefit from a reduction in interest or your mortgage payment.

Tracker Rate

A tracker rate will normally follow the movements of the Bank of England Base Rate at a particular percentage above or below it. You can track for a particular period of time, or track indefinitely, known as a ‘lifetime’ tracker. If the base rate increases, so will the rate applied to your mortgage along with your mortgage payments. If the base rate falls, so will your rate of interest and monthly payments.

Standard Variable Rate

Each lender has a standard variable rate which generally follows, although is usually higher than the Bank of England Base Rate. It is usually the rate your mortgage will revert back to once your fixed/tracker rate finishes. Standard variable rates can be high and vary between lenders so it is always important to ensure you diarise for when your introductory rate finishes. At Cooper Associates, your mortgage adviser will diarise to contact you.

What information will a mortgage lender need from me?

  • Your mortgage lender will require all of your personal information. They will want to know your full name, date of birth, address history, marital status and also whether you have any dependents.
  • The mortgage lender will require a three year address history for you so they can check your credit record. This will show all of the places you have lived, and the details of whenever you have applied for, or taken out credit. It also records any occasion where you have been late with a payment on a commitment, or missed it entirely. The main three credit referencing agencies lenders use to help them make a decision on whether to lend to you are Equifax, Experian and Call Credit.
  • The mortgage lender will require your employment history and details of your earnings to assess whether the mortgage is affordable. If you are self-employed, the mortgage lender will require information as to whether you are a sole-trader, a partnership, or a limited company and will request information based on your trading status. Most mortgage lenders require a minimum of two year’s trading.
  • The mortgage lender will require details of any credit commitments you have. These include committed payments which will be showing on your credit file (so it is important to be accurate) and also commitments which are regular but not showing on your credit file, such as nursery fees. It is important to be precise as the mortgage lender is likely to request bank statements for your application and will check any discrepancies between these and those commitments declared.
  • Your mortgage lender will require details of the property you are purchasing, such as the construction of the property and the year it was built. The mortgage lender will also request details of the person or estate agent you are buying from in order for them to do a valuation. They will also require details of the solicitor you have appointed to handle the legal work for you. Cooper Associates can recommend a solicitor should you require one.

Documents a lender may want to see

  • Photo ID
  • Proof of Address
  • Last three month’s payslips and most recent P60
  • Last two years SA302S / Accounts
  • Three month’s personal bank statements
  • Gifted deposit letter and proof of individual gifting
  • Further guidance - What can I use?

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