A mortgage guide for first-time buyers

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How do I compare

Once you’ve found the home you would like to purchase, you’ll need to obtain financial support from a lender in the form of a mortgage (if you cannot afford to pay for it outright). You’ll apply for your desired loan amount, and your lender will decide to grant you the loan or reject your application.

Because of the competition in the market, there are thousands of different mortgage products available. So deciding which one to apply for can be tricky unless you follow a procedure like the one below.

A good baseline way to compare the various types of mortgages is to compare the key facts which lenders are required by law to provide, these would be:

• The basic features of the loan such as interest and comparison rates, interest type, term of the mortgage, mortgage amount and repayment frequency.
• The total amount you’ll pay back over the course of the loan.
• The establishment and ongoing fees applicable to the loan.
• How much you’ll repay each month and each year.
• How much extra you’d pay if your rates increased by a 1% p.a.
• The difference putting an extra £200 a month towards your mortgage would make on the mortgage term.

These key points of comparison can help you sort through the advertising and get through to the bare essentials a loan has. It doesn’t explain all of the major features a mortgage might come with, so be sure to also get acquainted with these further below.

Types of deals

There are a number of different types of mortgages out there for first-time buyers; the right one for you depends on your personal circumstances.

Fixed rate

This option is popular with many first-time buyers as it means your interest rates would be fixed for the term of the deal which can be between 2 and 10 years. With fixed rate mortgages your repayments will also stay the same each month, which might appeal to those who like to budget and know how much they’re spending each month.

Capped rate

This is a type of variable mortgage, meaning your interest rate and repayments can go up or down depending on the lender or market. A cap simply allows you to only pay up to a certain amount each month but you also receive the advantages of low interest rates.

Discount mortgages

This is another type of variable mortgage where the interest rate you will be charged is discounted on the lenders standard variable rate. For example, if your lender has a SVR set at 4% and you have a discount of 1% you will pay 3% interest.

The interest rate can change overtime if the standard variable rate goes up and down.

Tracker mortgages

This type of mortgage ‘tracks’ the interest rate of the Bank of England to then set margin above or below it. It is a type of variable mortgage as the interest you will be required to pay on your mortgage will rise and fall in line with this base line interest rate.

Interest-only mortgages

Interest-only loans will see none of your repayments go towards the capital you owe the lender, but rather completely to the interest that’s due. This means your loan will never get smaller, but also means your repayments will be smaller than with an equivalent capital and interest loan.

If paying off a home is your aim, interest-only loans may see the process lengthened, and may see you pay more interest than with an equivalent principal and interest loan.

Common loan features

Even once you’ve chosen what loan type you’re after, there are a number of features in addition to the interest rate and fees you’ll pay which will complete the comparison phase. Some of the more common features offered on a home loan are explained below:

• Offset. An offset feature wrks by linking your savings accounts to your mortgage and allows any funds in the account to cancel out, or ‘offset’ some of the interest due on the outstanding mortgage amount.
• Additional repayments. Many loans offer the option to put extra money towards paying off your mortgage, and extra repayments can help to reduce the loan term quicker and the interest you pay. Some variable rate loans and most fixed rate loans will have a maximum amount of extra funds you can put towards your loan each year, while others may not allow any amount of additional repayments to be made.
• Borrow back. If you have overpaid on your mortgage you can borrow back and withdraw the money previously overpaid to use for whatever you like. This allows for flexibility to get access to funds in the event you need them but make sure you read the fine print, as some mortgages will have a minimum amount you can redraw at any one time.
• Mortgage portability. Selling a property and then buying another usually requires the closing of one mortgage and the opening of a new one. mortgage portability is an option that allows you to keep your loan and simply transfer it over to the new property, meaning you can avoid paying fees such as application fees or cancellation costs. This option typically has a number of requirements, such as keeping the mortgage amount the same and carrying out the exchange and settlement of both properties on the same day and same time. Learn more about porting your mortgage.
• Repayment frequency. Each repayment you make will get you closer to paying off your mortgage, and the frequency at which you make them is another choice you can make with most mortgages. Most allow for weekly, fortnightly and monthly repayments, so you can choose to pay it off in a way that suits your income.

Best mortgage for a first-time buyer

There’s no one “best” type of mortgage for first-time buyers, but there are a couple of features which might be more appealing to borrowers trying to get into the market.

• A high maximum LTV. LTV refers to the amount you can borrow as a percentage of the property value, and is usually limited at 80%, but can be as high as 95%. A 95% LTV means you can borrow 95% of the value of the property, requiring you to come up with at least a 5% deposit. An LTV of 80% would mean your deposit was 20%.
• Guarantor options. Some providers offer first-time buyers the chance to secure their mortgage by getting a parent or family member to act as a guarantee against the property. This might be a good option for you if you only have a small deposit or even no deposit at all but have a family member who is able and willing to meet your monthly mortgage repayments if you are unable to do so.
• Minimal fees and low rates. If you’re struggling to afford a property, you might want to keep costs down as low as possible. This means mortgages with minimal upfront or ongoing fees, and one with a low interest rate.
• Good customer service. If this is your first property and first home loan, you might want some expert advice to help you manage your loan better and be there in times of stress or emergency. For this reason you might want to select a lender with a proven track record of having great customer service.

Available schemes

There are shared ownership schemes available to those who are struggling to become homeowners. These allow you to buy a share in a property through a housing association and pay rent on the part of the property you don’t own.

The UK government have initiated help to buy schemes which allows you to borrow up to 20% of the value of your home (40% in London) interest-free for five years.

• Help to Buy

  First-time buyers could be eligible for the Help to Buy scheme, which is available until 2021 for those who want to buy a new-build house with a purchase price of no more than £600,000.

  Under this scheme, you can borrow 20% of the purchase price interest-free for the first 5 years, as long as you have at least a 5% deposit. If you live in London, you can borrow up to 40% of the purchase price. There are limits on the cost of the property you buy, which differs depending on where you live.

• Starter Home Scheme

  This is a new government plan, where 200,000 new-build homes are available to first-time buyers under 40 years old, with at least 20% off the market price. The discounted price for these homes should be priced no more than £250,000 outside London and £450,000 in London. Learn more about the Starter Home Scheme.

• Right to Buy

  Right to Buy is for tenants in England, Wales and Northern Ireland who rent their home from their local council. It allows tenants who qualify to buy their home at a discount. The size of the discount varies depending on where you live and the type of property you want to buy.

  Usually, tenants must have rented from the public sector (local council or housing association) for three years, which can be consecutive, before they can buy under these schemes.

  The scheme now extends to include housing association tenants in England. This started with a few housing associations in certain areas and has now been rolled out across the rest of England.

• Shared Ownership

  Anyone who has a household income of less than £80,000 outside of London or £90,000 inside London can buy a home through the scheme, although military personnel will receive priority over other groups.

  This is when you buy a share of a home from the landlord, who is usually the council or a housing association, then rent the remaining share. You will need a mortgage to pay for your share, which can be between a quarter and three-quarters of the home’s full value.

  A reduced rent is then paid on the share you don’t own. Later down the line you can choose to buy a bigger share in the property of up to 100% of its value.

Schemes in Scotland

• Help to Buy

  A Scottish government scheme designed to give first-time buyers a helping hand in purchasing a new-build home by providing an equity loan. You won’t pay any interest or fees on this equity loan for the first five years, but in the sixth year, you’ll be charged 1.75%. After then, the fee rises by inflation based on the retail price index (RPI) plus 1% each year.

  There are two types of schemes available within Help to Buy, the Affordable New Build Scheme and the Smaller Developer Scheme. Both work in the same way, but the scheme you apply for will depend on the home you choose to buy.

  The rules covering both strands of the Help to Buy scheme are identical:

  • You must have a deposit of at least 5%.
  • Your deposit and mortgage must cover a combined minimum of 85% of the purchase price.
  • The Scottish government will take a stake of up to 15% of the purchase price, holding security over this proportion until you own your home outright.
  • The mortgage must be a repayment mortgage of at least 25%. This cannot be an interest-only first mortgage.

• Open Market Shared Equity Scheme (OMSE)

  Looking to buy a home that’s for sale on the open market? The OMSE scheme could be for you. The buyer owns the biggest share of the property, usually somewhere between 60% and 90% of the home’s cost, while the Scottish government holds the remaining share under a shared equity agreement. Put simply, if you pay for 75% of the home, the Scottish government will provide assistance of 25% of the purchase price. Check that the home you wish to buy falls below the maximum threshold price for the area it’s in, which varies in Scotland depending on location.

  You’ll have complete title to your home and your name will be on the title deeds for it, but there will be a mortgage or standard security involved to make sure the Scottish government’s share is protected. This means if you choose to sell your home later down the line, the Scottish government will get a share of the money. There’s an option to up your stake in the property after two years, but the maximum stake you can buy is 90%.

• The New Supplied Shared Equity Scheme (NSSE)

  If you’re in the market for a new-build home from a housing association or local council, you might be able to get help through the NSSE scheme. This operates on a similar basis to the OMSE scheme, where you’ll be able to buy a new-build home without having to fund its entire cost. You’re given the opportunity to up your stake after two years, but with the NSSE scheme, you can up your stake until you own the entire property.

  Since this scheme is aimed at households with low to medium incomes, the local council or social landlord in your area will assess your application to see if you qualify. For this, you’ll need to show you can’t buy a new-build house that suits your needs, without financial help from the scheme.

Schemes in Wales

• Help to Buy Wales

  Help to Buy Wales is an equity loan scheme in which you can borrow up to 20% of your property’s value from the Welsh government to add your deposit. The loan is interest-free for the first five years.

  This scheme can be used to purchase new-build properties in Wales with a deposit as small as 5% of the property’s value. Assuming you borrow the full 20% as an equity loan, that means you can access a 75% mortgage and the superior rates that comes with it.

  The main difference between this and the English scheme is that it’s only available on properties worth up to £300,000.

• Shared ownership Wales

  Shared ownership, the scheme which allows you to buy between 25% and 75% of your home and pay subsidised rent on the rest, is available in Wales. The terms are the same as in England.

• Rent to Own Wales

  Under this scheme, the Welsh government gives tenants 25% of their rent back to add to their mortgage deposit, once they’re ready to buy the house they’re living in. They’ll also get 50% of any value growth their property has experienced since they moved in.

  A Rent to Own lease will last five years and you can apply to buy the property any time between the end of your second year and the end of the lease.

  To register your interest in the scheme, contact one of the Rent to Own landlords working in your local area. There’s a full list of their contact details on the Rent to Own website.

• Homebuy

  Homebuy is a simple shared equity scheme where the Welsh government pays for 30% of your home’s equity. You’ll need to be able to contribute the remaining 70% via a deposit and a mortgage.

  The equity loan doesn’t need to be repaid until you sell the house. You’ll pay 30% of your selling price, rather than the monetary figure you borrowed from the government.

  It’s possible to pay the figure back early, in which case your house will be revalued to determine the figure owed.

  You can register your income in the Homebuy scheme by contacting a participating registered social landlord operating in your area.

Schemes in Northern Ireland

• House sales scheme

  This scheme allows eligible social housing tenants in Northern Ireland to buy their home at a huge discount. You could be entitled to a discount worth of 60%, or £24,000, whichever is smaller.

  To be entitled for the scheme, you’ll need to have lived in the property for at least five years. At this point, you’ll be entitled to a 20% discount on the property’s market value. If you’ve lived there even longer, you’ll be eligible for a larger discount. It increases by 2% for every additional year you’ve lived there.

  You can apply via an online application form on the NI Direct website. The form will be passed on to your landlord, who will respond to your offer revealing whether they want to sell, as well as confirming the property’s market value and the proposed discount. You must respond within six weeks of receiving the offer.

  If you sell the house within five years, you’ll have to repay the full discount. If you sell within 10 years, you’ll have to give your landlord first refusal on buying the property back.

• Co-own

  This scheme, available from a body called Co-ownership, is Northern Ireland’s version of shared ownership. It allows first-time buyers who can’t afford to buy a property outright to “part buy, part rent” one.

  You can buy between 50% and 90% of the property and Co-ownership will buy the rest. You’ll need to arrange a mortgage for your portion of the property and pay subsidised rent to Co-ownership on the rest of it.

  In many cases, you won’t even need a deposit, because Co-ownership will cover this.

  You can buy additional portions of the property from Co-ownership when you can afford to. Each time you do this, the property will be revalued, so the portions become more expensive if the market value of your house grows.

  When you sell up, Co-ownership receives 100% of the property’s capital gains. The rest of the property’s value will be distributed based on the proportion owned by each party.

• Rent to own

  Under the scheme, you can choose any brand-new home in Northern Ireland under £165,000, ask Co-ownership to buy it and rent it to you.

  You’ll be given a three-year lease on the property, with the expectation that you’ll buy it from Co-ownership during this timeframe, either outright or using Co-own.

  You can apply to buy the property any time after the first year of renting. When you’re ready to do so, Co-ownership will give you back 25% of your rent to add to your mortgage deposit.

Schemes in London

• Help to buy London

  Under the Help To Buy London scheme, you can borrow up to 40% of your desired property’s value from the government to add to your mortgage deposit.

  That means you may only need to stump up 60% of the property’s value through a deposit and mortgage.

  The loan is interest-free for the first five years, and you’ll pay it back at the end of your mortgage term or when you sell the property.

  This scheme is available on new-build properties in London worth under £600,000. You’ll need to raise a deposit worth at least 5% of the property’s value to take advantage of this scheme.

  There are several terms determining your eligibility for this scheme, so it’s important to understand these before applying.

• Homes for Londoners

  Aiming to help low and modest income earners buy or rent in the capital at an affordable price, this scheme sees you part buy and part rent a property. There are eligibility criteria based on earnings and it’s important to remember that you can’t buy a home on the open market.

First-time buyers and stamp duty?

If you’re a first-time buyer in England or Northern Ireland, you will pay no stamp duty on properties worth up to £300,000, which could see you saving up to £5,000.

This means for properties costing up to £500,000, you will pay no stamp duty on the first £300,000, but you will pay stamp duty on the remaining £200,000. If the property you’re buying is worth over £500,000, you’ll pay the standard rates of stamp duty and won’t qualify for first-time buyers relief.

As of October 2018, first-time buyers under Shared Ownership schemes can now claim first-time buyers stamp duty relief on homes worth up to £500,000.

It’s also worth noting if you chose to pay stamp duty in stages and were previously not eligible for the relief, you can now claim this tax back. Unfortunately, if you chose to pay stamp duty on the market value of the property, your entitlement to claim the relief has not changed.

How do I get approved?

Save a larger deposit

For some first-time buyer schemes, you’ll be eligible to apply with a deposit worth just 5% of your property’s value.

However, if you can save a larger deposit, you’ll improve your chances of being approved for a mortgage and may even be able to access better interest rates.

Here are some ideas to help you save a bigger mortgage deposit.

• Help to Buy Isa. If you transfer savings in this account and put the money towards a mortgage deposit, the government will top up your funds by 25%. You can make an initial contribution of £1,200, then £200 a month, up to a maximum of £12,000.
• Lifetime Isa. The government will also pay a top-up on savings stored in this account. You’ll get a 25% bonus on a maximum of £1,000 per year, available every year until you turn 50. The bonus is paid when the money is put towards a mortgage deposit or your retirement fund. If it’s withdrawn for any other reason, you’ll pay a penalty charge.
• Gifted deposit. You might roll your eyes if you’re not lucky enough to have anyone willing to help fund your mortgage deposit, but the fact remains that a lot of first-time buyers are receiving financial assistance from family members. Many see it as an intelligent investment. After all, it stops their children wasting money on rent and potentially reduces their own inheritance tax bill (provided they live for seven years after making the gift).

Joint applications

You can apply jointly for a mortgage with up to three other applicants.

When you do this, the income of all applicants is considered jointly, meaning you’ll be eligible to borrow a larger amount for a property. Assuming everyone is pitching in, you’ll find it easier to save a larger deposit too.

Your credit scores will also be considered jointly. This could improve your chances of being approved for a mortgage, provided your co-applicants have a better credit score than you. If they have bad credit, it could harm your application.

There are some downsides to a joint application. For starters, you’ll all have to agree when you want to sell the property. Also, if a co-applicant stops making mortgage repayments, you’ll be equally responsible for the shortfall.

As such, you should only jointly apply for a property with someone you trust.

Improve your credit score

Even after saving a suitable deposit, a lot of first-time buyers are still denied a mortgage because of a bad credit score.

It’s important to start working to build your credit score now so it’s in a good state when the time comes to make your mortgage application.

Your credit score improves when you make timely repayments on your debts and bills. If you’re not already paying bills by direct debit, it’s worth setting a couple up. Consider applying for a credit-builder credit card, making small purchases on it and paying if off in full every month.

More importantly, ensure that no repayments are missed and that none of your financial accounts go overdrawn. This can decimate your credit score and ruin your chances of being approved for a mortgage.

If your credit score is looking worse for wear, explore the options for first-time buyers with bad credit.

Reduce your outgoings

Lenders will check your recent bank statements to ensure you’ll be able to comfortably afford your mortgage repayments. The bigger the gap between your income and your regular outgoings, the more eligible you’ll appear.

For this reason, it’s worth seeing what you can do to reduce your outgoings.

Cancel unnecessary direct debits and standing orders. Pay off as many debts as you can, especially those you’re paying interest on. Haggle over the cost of your utility bills.

It’s also worth closing any accounts that give you access to additional credit you’re not using. Many lenders perceive this additional credit as an additional opportunity for you to get into unsustainable debt and this could count against you when making a mortgage application.

Make corrections to your credit report and the electoral role

Make sure your correct name and address is registered on the electoral role. This is a quick task, which can have a significant impact on your mortgage application.

Check your credit report for errors too. You can view your report and amend errors by contacting any of the UK’s three major credit reference agencies.

Make intelligent decisions regarding your property and mortgage lender

The cheaper the property and the less you’ll have to borrow from a lender, the easier you’ll find it to be approved for a mortgage.

Most mortgage lenders will let you borrow a maximum of 4.5 times your annual income for a mortgage, provided you can comfortably afford to make the monthly repayments.

When hunting for a property, consider what you need and what you’re likely to be approved for. We’d all like a guest bedroom, but many first-time buyers would find it far easier to be approved for a mortgage if they sacrificed this.

If you enlist expert help when choosing a mortgage provider, this will make it easier to be approved.

A professional mortgage adviser will not only be able to point out the best available deals, but also recommend the lenders most likely to work with someone in your situation.

This will save you from making multiple applications to multiple lenders, only to be rejected. Doing this will harm your credit score, making it tougher to be approved by other lenders in the future.

Best lenders

If you’ve never taken out a mortgage before, you may be feeling overwhelmed by the amount of choice available, with hundreds of lenders offering thousands of different deals. Although this highly competitive mortgage market is good for borrowers, it means that narrowing down your options isn’t always straightforward.

House prices have grown rapidly over the last 20 years so it’s become increasingly harder to get onto the property ladder. The average first-time buyer deposit was 23% of the purchase price in February 2019, according to trade body UK Finance. This equates to nearly £49,000 based on the average loan size.

If you’re lucky enough to be able to save up a big enough deposit and afford the mortgage repayments there are plenty of mortgage lenders who will consider lending to you. But, if not, there are a number of specialist mortgage types offered by a more limited number of lenders that are designed to help.

Below, we’ve highlighted some of the lenders offering the best options we found at the time of writing but the best mortgage deal for you will depend on your circumstances and what’s available at the time. It’s a good idea to speak to a mortgage broker who can look at the whole market to help you find the best deal. Some products are also only available through brokers.

• Best lenders for standard first-time buyer mortgages

  As lenders tend to offer initial deals over a number of years before moving you onto their higher standard variable rate for the rest of the mortgage term, you should switch to a new deal – either from the same lender or a different one – at the end of the initial period. For this reason, to find the cheapest deal you should look at the total cost (including fees, which can bump up the cost significantly) over this period rather than the whole term.

  The more deposit you have, the cheaper the deals you can generally get.
  If you had a 23% deposit of £49,000 and borrowed £164,000 to buy a £213,000 property (77% loan-to-value) over 25 years using a two-year fixed-rate deal, your initial rate could be as low as 1.55% to 1.7% with the total cost from around £17,050 over the two years. Using this scenario, the cheapest lenders we found were Halifax, HSBC, NatWest, Nottingham Building Society and Post Office Money.

  But if you borrowed the same amount with a loan-to-value of 90%, the best equivalent deals would have initial rates of 2.59% to 2.89% and the total cost of the deal would start from almost £18,400 – a difference of around £1,350. The lenders we found offering the cheapest deals using this scenario were Barclays, Clydesdale Bank, HSBC, Post Office Money and Progressive Building Society.

• Best lenders for first-time buyer Help to Buy mortgages

  The Help to Buy equity loan scheme was launched by the government in 2013 to make buying a newbuild home in England and Wales more affordable. It’s currently open to all buyers, although from 2021 it will only be available to first timers. There’s a similar scheme in Scotland.

  You pay a minimum deposit of 5% of the value of the property and the government gives you a loan for up to 20% (40% in London). This means you only need to take out a mortgage for the remaining 75% so will have access to the cheapest deals. You don’t have to pay interest on the 20% loan for the first five years, which makes your repayments more affordable during this period. When you sell the property you pay 20% of the sale price back to the government.

  Not all lenders offer mortgages for Help to Buy but big names that do include Barclays, Halifax, HSBC, Lloyds Bank, NatWest/Royal Bank of Scotland, Post Office Money and Santander.

  According to Moneyfacts.co.uk, Barclays, Leeds Building Society, Santander, Skipton Building Society and Virgin Money are offering some of the cheapest two-year fixed-rate deals with initial interest rates of 1.59% to 1.83% and product fees of £749 to £999.

• Best lenders for first-time buyer shared ownership mortgages

  With shared ownership you buy a share of a property through a housing association and pay rent on the rest. You can either buy a newly built home or one that is being resold.

  It makes buying the property more affordable because you only need a deposit of 5% of the share you are buying to put towards the mortgage, and the rent you pay on the rest is lower than the usual market rate. You can start by owning just a 25% share but increase it as you can afford to if you wish.

  There’s a Help to Buy shared ownership scheme in England and other schemes throughout the UK. You need to be a first-time buyer or a previous property owner who can’t afford to buy a home outright now.

  Lenders offering good shared ownership mortgage deals include Barclays, HSBC, Hanley Economic Building Society, Nationwide and Santander with rates from 2.85% to 2.99%, according to Moneyfacts. Most of these don’t have product fees.

• Best lenders for first-time buyer guarantor mortgages

  A guarantor mortgage lets you borrow up to 100% of the property price with a family member, such as parents, using their savings or equity in their property as security for the loan. They will usually be released from this arrangement once certain criteria are met.

  Interest rates range from 2.64% to 5.28% for fixed and variable-rate deals according to Moneyfacts. Marsden Building Society is currently offering the lowest two-year fixed rates with its Family Step mortgage (although product fees apply), which is only available through brokers. Barclays (with no product fees), Buckinghamshire Building Society, Loughborough Building Society and Mansfield Building Society are also worth a look.

  Marsden is offering the lowest two-year variable rates too. Bath, Buckinghamshire, Loughborough, Mansfield and Tipton & Coseley Building Societies are others to consider. Once again, make sure you take product fees into account when looking at which are the cheapest deals over the initial period.

Application process

Research

Before you apply for a mortgage, it’s important that you understand the different types available and how interest on them is calculated. From this, you can work out how much you can borrow based on your savings and your income, using online affordability tools.

Speak to a mortgage broker

Speak to a mortgage broker, who will search the market for a deal that is best suited to your situation. But make sure you check that they are on the Financial Services Register first, which will ensure they are properly authorised.

Find your property

The next important step is to find a property within the budget you have set out. Once you’ve found this perfect home, go back to the lender and begin the mortgage application. This will involve detailed research into your finances, including earnings, expenditure and a full credit check with a credit reference agency.

Frequently asked questions

• What documentation will I need?

  What is required will vary between lenders, and may also vary depending on your personal circumstances but the points below are a good starting point:

  • Utility bills.
  • Proof of benefits received.
  • P60 form from your employer.
  • Paylsips for the last three months.
  • Passport or driving licence (to prove your identity).
  • Bank statements of your current account for the last three to six months.
  • Statement of two to three years’ accounts from an accountant if self-employed.
  • Tax return form SA302 if you have earnings from more than one source or are self-employed.
  • Self-employed people should look to provide information alongside their tax return, which supports what the SA302 says about their income, such as bank statements.

• What if my mortgage application is declined?

  There may be a few reasons the lender has declined your application. Firstly, it’s a good idea to check that all the information you provided is correct and that you’ve reviewed everything carefully.

  If you’re not earning enough or you’re spending too much, the lender might have decided that you would not be able to afford your repayments. In this case, it’s wise to rethink the size of the mortgage you are applying for and how to budget your spending.

  One major barrier for getting a mortgage can be your credit history, particularly if you have a history of missed payments, defaults or insolvency. Checking your credit report thoroughly before you apply can help spot any problems that might concern a lender.

  If you do have credit issues, it’s a good idea to ensure all your debts are cleared and try to re-build your credit history by making reliable and regular repayments before applying again.

  It’s also possible to get something called a guarantor mortgage if you cannot secure a mortgage on your own. This is when another person, usually a relative or close friend, agrees to accept responsibility for the debt in the event that you are unable to keep up repayments.

• Can I get a buy-to-let mortgage?

  Put simply, yes, but you may be limited when it comes to getting a mortgage. The first question to ask is, are you a first-time landlord or a first-time buyer?

  This is key as a large percentage of lenders need you to have owned your own residential property for at least six months before they will offer you a buy-to-let mortgage. Others will only ask that you own a property, so you could have another buy-to-let property while living in rented accommodation.

  However, if you’re a first-time buyer or don’t currently own a property, your mortgage options will be limited.

• What deposit do I need?

  Before looking at properties, you need to save for a deposit. Generally, this should be at least 5–20% of the cost of the home you would like to buy. For example, if you want to buy a home costing £150,000, you’ll need to save at least £7,500. We recommend saving more than 5% if possible, which will give you access to a wider range of cheaper mortgages available on the market.

• How long does it take to get a mortgage?

  The entire mortgage process has several parts, including getting pre-approved, getting the home appraised and getting the actual loan. In a normal market, this process takes about 30 days on average.

  During high-volume months, it can take longer, somewhere between 45 to 60 days, depending on the lender. If any financial issues are discovered in your record such as a low credit score, previous foreclosure or overwhelming debt, getting a mortgage may be a much slower process.

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