Getting your first home can feel like dodging red flags left, right, and centre. With constant warnings about rising costs, stricter lending criteria, and outdated advice from well-meaning relatives, it’s easy to feel like you’re treading water in the deep end!
But here’s the good news: the path to your safe zone – a place you can call home – is closer than it seems.
Here are 10 smart strategies that first time buyers are already using to turn their dreams of homeownership into a reality:
- 0% Deposits
Saving for a deposit can be challenging. Some lenders now offer 100% mortgages, allowing you to buy a home without any upfront deposit. If you’ve been renting and have a good payment history, this could be your path to ownership.
- Low Deposit Mortgages
If you’re struggling to save for a large deposit, some lenders offer mortgages requiring as little as 3% of the property’s value. Alternatively, certain products are available with a set deposit of £5,000. Both options make homeownership more accessible, especially if saving for a traditional deposit feels out of reach.
- Gifted Deposits from Family or Friends
Many first time buyers receive help from family or friends in the form of a gifted deposit. This is a sum of money given to you to help with your home purchase. Lenders typically require a letter confirming it’s a gift, not a loan.
- Builder-Gifted Deposits
When buying a new build home, some developers offer to contribute towards your deposit, often up to 5% of the property’s value. This reduces the amount you need to save and can make buying a new home more accessible.
- Landlord Discounts
If your landlord is looking to sell the property you’re renting, some schemes allow them to provide a 5% discount, which can serve as part of your deposit. This benefits both parties: you get a home you know well, and the landlord saves on estate agent fees.
- Joint Borrower, Sole Proprietor Mortgages
Need help borrowing more? Using up to four incomes, a family member or friend can join your mortgage application with a Joint Borrower, Sole Proprietor mortgage. Their income boosts what you can borrow, but they won’t have any ownership rights to the property – it stays 100% yours.
- Using a Loan for your Deposit
While less common, some buyers use personal loans to fund their deposit. This approach requires careful financial planning, as it increases your monthly outgoings. Lenders will assess your ability to manage additional debt alongside mortgage repayments.
- Equitable Charge Deposit
A second charge loan allows someone – typically a parent or close relative – to put a charge against the equity in their home as your deposit. It’s often chosen by families who want to support first-time buyers but don’t have cash readily available.
- Shared Ownership
Shared ownership lets you purchase a portion of a property – starting from 25% and in some cases 10% – and pay rent on the remaining part. This means a smaller deposit and lower monthly payments. Over time, you can buy more shares until you own the whole property.
- Higher Income Multiples
Some lenders now assess how much you can borrow for your mortgage up to six times your income, allowing you to borrow more than ever before. This is ideal for those with strong financial stability but struggling to secure enough borrowing under traditional criteria.
Want to learn more? Head over to our TikTok @Mortgage.Light (or scan the QR code!), where we’re breaking it all down in short, simple videos designed for first-time buyers. Follow us for tips, insights, and everything you need to know about getting on the property ladder.
Your dream home might be closer than you think. Let’s make it happen together.
First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.
