Every day we’re talking to younger buyers who are keen to break the expensive rental cycle and take those first exciting steps onto the property ladder. With so many options available on the market today, the process can quickly become daunting and confusing for a first time buyer.

So to help you better understand the steps involved in buying a home, we’ve pulled together the most frequently asked questions from our customers.

How much do I need to save for a deposit?

The deposit that you will need depends on the cost of the house. With Help to Buy, you only need to save 5%. So if the house that you desire is priced at £150,000, then your deposit would be £7,500. Through Help to Buy you will also receive a 20% government loan, which means that you just need to secure a 75% mortgage.

How much stamp duty will I have to pay?

You pay no stamp duty on the first £125,000, then 2% on the next £125,000 and 5% above £250,000. For example, on a property worth £150,000 you would pay nothing for £125,000 of the property value, and 2% on the remaining £25,000.

What costs are involved in buying a home?

Aside from your deposit, monthly mortgage payments and stamp duty, it’s important to note that the mortgage lender that you choose may have an arrangement fee. You should also factor in any moving costs.

When applying for a mortgage, how much can I borrow?

The amount that you can borrow to buy your first home will depend on how much you earn, and how much of a deposit you have to put down. Lenders will not want to lend you more than they think you can afford, so they’ll restrict the amount you can borrow to around four times your income. This can vary from lender to lender, so it’s worth shopping around. It’s also important to note that with Help to Buy you will also receive a 20% interest free loan, so your mortgage is only 75% of the property value.

What will lenders want to know?

As well as looking at your income, lenders will want to check your credit history so they can see how you’ve managed any borrowing in the past, and if you’ve missed any repayments.

How long should my mortgage run for?

Most borrowers opt for a mortgage that is repayable over 25 years, but you can sometimes choose a longer term than this. Remember, the longer your mortgage lasts, the more interest you will pay overall.

Why should I buy a new build home?

Buying a new build home is much less stressful, and cost-effective, than buying an older home. New build homes are designed to use less energy, have no chain and are untouched by previous owners, proving a blank canvas for you to put your stamp on.

Got a question that we haven’t answered here? Send us a tweet @NGVLiverpool and our friendly team will be in touch!

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