First Time Buyer Guide

Taking your first step onto the property ladder is an exciting milestone, but it can also feel overwhelming. This comprehensive guide will walk you through everything you need to know about buying your first home in Taunton, from saving for a deposit to completing on your dream property. For more detailed information, see our complete Taunton first-time buyer mortgage guide.

How Much Deposit Do You Need?

One of the first questions first-time buyers ask is: "How much deposit do I need?" While it's possible to get a mortgage with just a 5% deposit, putting down more can significantly improve your options. Read our detailed guide on Taunton mortgage deposit requirements:

• 5% Deposit: Available through government schemes and select lenders, but fewer products to choose from
• 10% Deposit: Opens up more mortgage options with better interest rates
• 15-20% Deposit: Access to the most competitive rates and wider product range

Don't forget to budget for additional costs like stamp duty (though first-time buyers are exempt up to £425,000), legal fees, survey costs, and moving expenses.

Understanding How Much You Can Borrow

Lenders typically offer mortgages of 4-4.5 times your annual income, though some may lend more in certain circumstances. Learn more about how much you can borrow for a mortgage in Taunton. For example:

• Individual earning £30,000: Could borrow approximately £120,000-£135,000
• Couple earning £50,000 combined: Could borrow approximately £200,000-£225,000

However, affordability isn't just about income multiples. Lenders also assess:

• Your monthly outgoings and financial commitments
• Credit history and credit score
• Job stability and employment type
• Future interest rate increases (stress testing)

Types of Mortgages for First-Time Buyers

There are several mortgage types to consider:

Fixed-Rate Mortgages: Your interest rate stays the same for a set period (typically 2, 3, or 5 years), making budgeting easier as your monthly payments won't change.

Variable-Rate Mortgages: Interest rates can go up or down, including tracker mortgages (following the Bank of England base rate) and standard variable rates (SVR).

Repayment vs. Interest-Only: Most first-time buyers choose repayment mortgages, where each payment covers both interest and a portion of the capital, ensuring you own the property outright at the end of the term.

First-Time Buyer Schemes

Several government schemes can help you get on the property ladder:

First Homes Scheme: Purchase a newly built home at a 30-50% discount (subject to eligibility criteria).

Shared Ownership: Buy a share of a property (typically 25-75%) and pay rent on the remainder, with the option to buy more shares over time.

Lifetime ISA: Save up to £4,000 per year and receive a 25% government bonus (up to £1,000 annually) towards your first home purchase.

Our advisors can explain which schemes you're eligible for and help you make the most of available support.

The Homebuying Process: Step by Step

1. Get a Mortgage Agreement in Principle: This shows sellers you're a serious buyer and gives you a clear budget.

2. Start House Hunting: Look for properties within your budget, considering location, commute, local amenities, and potential for growth.

3. Make an Offer: When you find the right property, make an offer through the estate agent. Be prepared to negotiate.

4. Apply for Your Mortgage: Once your offer is accepted, you'll submit a full mortgage application with all required documentation.

5. Property Survey: The lender will arrange a valuation, but consider getting your own survey to identify potential issues.

6. Conveyancing: Your solicitor will handle the legal aspects, including searches, contracts, and transferring funds.

7. Exchange Contracts: At this point, you're legally committed to the purchase, and you'll pay your deposit.

8. Completion: The remaining funds are transferred, you receive the keys, and you can move into your new home!

Building Your Deposit

Saving for a deposit requires discipline, but there are strategies to help:

• Create a dedicated savings account and set up automatic transfers
• Use a Lifetime ISA to maximize government bonuses
• Consider living with family temporarily to save on rent
• Cut discretionary spending and redirect funds to savings
• Ask about gifted deposits from family members

Improving Your Credit Score

A good credit score can help you access better mortgage rates. To improve yours:

• Register on the electoral roll at your current address
• Pay all bills and credit commitments on time
• Reduce existing credit card balances
• Avoid making multiple credit applications in a short period
• Check your credit report for errors and get them corrected

Common First-Time Buyer Mistakes to Avoid

• Maxing out your budget: Leave room for unexpected costs and future changes
• Skipping the survey: A survey can identify costly problems before you commit
• Not shopping around: Using a broker gives you access to the whole market
• Forgetting ongoing costs: Factor in insurance, maintenance, and utility bills
• Rushing the decision: Take time to find the right property in the right location

Why Use a Mortgage Broker?

As first-time buyers, the mortgage market can seem complex. A broker can:

• Search the entire market to find the best deal for your circumstances
• Explain complex terms and processes in plain English
• Handle paperwork and liaise with lenders on your behalf
• Increase your chances of approval by matching you with suitable lenders
• Save you time and stress during an already busy period

At Taunton Mortgages, our service is completely free for first-time buyers. We're passionate about helping people in Taunton and Somerset achieve their dream of homeownership.

Ready to take the first step? Contact us today for a free consultation, and let's start your journey onto the property ladder.