Typically a First Time Buyer is someone who hasn’t owned a property before, but this is not always the case. Some lenders have criteria that ‘resets’ their First Time Buyer policy, for example Nationwide will allow you to utilise their First Time Buyer products again if you haven’t owned a property or been on a mortgage 3 years prior to any application*.

As a first time buyer you generally have more options which are essentially ‘introductory’ offers. For example, Nationwide offer a ‘Helping Hand’ scheme which offers a 5.5x income multiple for sole and joint applicants, whereas most other lenders will only allow you to multiply your income by 4.25 or 4.5 times.

Lenders also typically give first time buyers a number of incentives such as cash back with their first purchase.

*Criteria subject to change by the lender.

Having bad credit means your credit file shows things that may put lenders off from providing you a mortgage. This can include late or missed payments, or having lots of existing debt. More severe things that can impact you getting a mortgage can include Defaults, County Court Judgements (CCJ), Bankruptcy, Individual Voluntary Arrangement (IVA) or a Debt Management Plan (DMP).

The good news is that there is a whole sector of the mortgage market geared up to lend borrowers/clients money for their next or first home purchase or remortgage if they have bad credit. These mortgages are just like regular mortgages, except they come with higher interest rates and there could be a lower limit on how much you can borrow. You might also be asked to come up with a larger deposit of at least 20-25% of the value of the property, rather than 5-10%.

With the cost of this type of mortgage being higher it is important you speak to a specialist.

A 95% is like any other mortgage but it only requires a 5% deposit to purchase your home. This is fantastic news as previously you needed 10% or more!

This isn’t just available for First Time Buyers these mortgages are available for anyone looking to buy for the first time or moving.  As you would expect, with a low deposit the interest cost of these products is higher than if you had a 10% or 15% deposit. Speak with an expert today to find you the best 95% mortgage.

This scheme works by providing you a mortgage on part of the property, and you then pay rent on the rest e.g. you own 40% of the property and pay rent of the un-owned 60%. This means you can buy a home with a smaller deposit and will own 40% of the property.

For example if you found a property at £300,000 and wanted a 40% you would be buying £120,000 of that property and this is the part you would seek a mortgage on. If you wanted to put down a 10% deposit, you would only need to put down 10% deposit on the part you are buying e.g. the £120,000 so £12,000 deposit and not the full £300,000 value of the property.

Rent is typically charged at around 3% of the unowned portion of the property. In the example above if you take £180,000 which is the unowned portion you pay rent on, and multiply this by 3% this gives you £5,400. If you divide this by 12 this gives you the monthly rental figure of £450 (£300,000 x 60% x 3% / 12).

You have the option to increase you share from 40% up to 100% (usually) and this is called ‘Staircasing’.

Advantages of shared ownership

• You can buy the part of the home you’re renting out at a later date
• Gives you a chance to own your home, even without a big deposit
• You pay rent on a property that you have a chance of eventually owning
• You can sell your shared ownership at any time, even if you don’t fully own it

Disadvantages of shared ownership

• When selling your home, the housing association may not give you full control over who you sell to
• You have to pay ground rent and service charges on your home
• If you’ve purchased a flat, you might need to pay maintenance charges