Buying your first home is a major step. Unless you're very lucky this most important landmark has been reached after a long, long trail of saving for the deposit. It's probably a good thing you've got used to watching the pennies, because house and mortgage hunting will probably take all your time, patience and money.
When it comes to how much you can borrow, this depends on the lender's judgement and conditions. Rather than the traditional "multiples" way of your borrowing being worked out by your pre tax income times around three and a half, many lenders are favouring an alternative way of estimating your mortgage-worthiness.
Sensibly, affordability is now one of the favoured ways of lender's judging what you can afford.
As well as your income, they also bear in mind any extra costs and expenses, things like debts which you have to pay off. They'll consider whether or not you have children or other dependents and some may take into account your earning power in the future. For instance, a newly qualified professional is quite likely to quickly build up earning power and a modest starting salary can be expected to turn into something better.
Banks and building societies are understandably cautious about lending too much to a first time buyer, who has no proven track-record of successfully handling a mortgage and it's in your own interest not to commit yourself to a higher mortgage re-payment than you can realistically maintain. Life goes on beyond mortgage payments, cars break down and need repair or replacement, furnishing a new home can take its toll and interest rates can go up. A fixed rate loan can help here, but they've not fixed for ever and the next loan could be at a higher rate.
The average age for first-time buyers has changed over the years. It used to be quite common for a couple to get married in their early 20's and move straight into their first home, be it a flat or terraced property, and to move up the property ladder fairly swiftly. Nowadays it's not uncommon for first-timers to be 30 plus before they take the home-ownership step. The problem is saving for the deposit, rather than not being able to afford the mortgage repayments. Quite often, particularly when work takes them further from the family home than a reasonable travelling distance, it's necessary to rent accommodation.
The high cost of this makes it very difficult to save for a deposit for a home and the frustrating result is a vicious circle of if I didn't have all this rent to pay, I could pay a mortgage "I can't get a mortgage because I don't have enough money to put down a deposit. If I didn't pay all this rent, I could save for a deposit."
So, back to affordability, the mortgage situation is ever-changing. We have swung from 100% loans for first-timers, to needing at least 25% deposit and back again. Whatever's happening, the thing to do is to get saving save every penny you can. Keep an eye on the situation. There may be first-time buyer's special opportunities on new properties. Builders like first time buyers.
If you're lucky enough to have accumulated a reasonable deposit, then, as a first-time buyer, you're in a good position to go in with an offer on a property. The fact that you don't come with a "chain" attached will be appealing to the seller and you could find yourself with a good deal.
The very best deals on mortgages can be found by going on-line. An independent broker will search a very wide market to find the right loan for you, working within your budget. Even if you're not quite in the position to buy just now, you could get in touch and find out just what's what. There's no charge for advice or for excellent service.remortgages
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