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Ask an Expert I am a first time buyer and would like to find out how much I can borrow?

I am a first time buyer and would like to find out how much I can borrow?

Q: I wonder if someone could advise me please? I am a first time buyer and have not yet selected a property that I would like to buy as I am keen to find out how much I would be accepted for on a 100% mortgage before I start to check the market. I have no de

A:

Thank you very much for your question. A lot of people are looking to buy their first homes at the moment. Although lending restrictions have eased over the last few months, all lenders will want buyers to put in at least a 5% deposit, preferably 10% (there is only 1 lender who will consider a 5% deposit). This could be from your own savings or perhaps a gift from a generous relative! Remember that you will also need to budget for the costs of buying – survey, legal fees, etc. These, and much, much more, are explained in our Guide to Buying a House. It is available to view and download from our website I hope you find it interesting and informative. If appropriate, there are various government backed and shared ownership schemes which can help first time buyers with small deposits. The internet is a good source of information about these. With a 5% or 10% deposit, lenders will want you to have your mortgage on a capital and interest repayment basis, so that you are reducing the amount of  debt with every monthly payment. Interest only mortgages would not be acceptable. It is sensible to be thinking about fixed rates, as the Bank of England interest rate will not stay as low as it is now forever. A fixed rate will protect you against future increases in interest rate and monthly payment, typically for between 2 and 5 years. Usually you pay a little more for a 5 year fixed rate than a 2 year one, but many consider this worthwhile for the extra peace of mind this gives. The amount that you can borrow will be dictated by your income – a general guide is that up to 4 times your salary can be possible.  As always, every client’s circumstances and plans are different, so there is no one mortgage that will be best for everyone. At largemortgageloans.com, we take great pride in getting to know our clients so that we can best advise on all aspects of property finance. As well as the mortgage, we will help with all the appropriate insurances to ensure that you are getting the very best possible deal for you If you would like to discuss your plans personally, please do contact us on 0207519 4900. I will be happy to help, thanks again for your enquiry and I hope my reply has been useful.

These questions are for information purposes only and do not contain all the details you need to choose a mortgage, ask one of our advisers for a personalised key facts illustration
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This Month’s Top Fixed Rate

Fixed rate
Initial rate: 1.35%

Period: 2 years

Rate will revert to a variable rate, currently 4.99% thereafter
The overall cost for comparison is 4.46%

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This Month’s Top Variable Rate

Variable rate
Initial rate: 0.97%

Period: 2 years

Rate will revert to a variable rate, currently 4.99% thereafter
The overall cost for comparison is 4.37%

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Some of this month's top interest rates are listed above; the actual rate will depend on your circumstances. Please note that this information does not contain all the details you need to choose a mortgage, ask one of our advisers for a personalised key facts illustration on 020 7519 4900. The rate displayed may become out of date at short notice.

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