Residential Mortgages

First time buyer mortgages

Residential Mortgages Scotland

So, after weeks or even months of searching, you’ve finally found your dream home. Surely the hard part’s over? Unfortunately not.

Buying a property is never a small undertaking. Throughout the process, you’ll have many important decisions to make that will affect the way you pay for your home, possibly for decades. You’ll have to decide on the type of mortgage that works for you, put in a mortgage application and deal with stamp duty and surveyors. If you’re feeling overwhelmed and intimidated, it’s completely understandable, particularly if you are buying your first home.

The Lending Channel is here to make the process of buying a house as smooth and stress-free as possible. 

So, what happens after you put that offer in? Should you secure a mortgage beforehand? How long will the buying process take? And what’s the deal with a first-time buyer mortgage?

When should I start applying for a mortgage?

Generally speaking, it’s never too early to start looking into your options. This means even before you’ve started looking for a house to buy. This is important because:

  • It’ll let you know how much you can feasibly afford before you begin to set your sights on potential homes.
  • It helps create a smoother buying process down the line if you have a good idea of what is within your remit.
  • Having a mortgage agreement in principle makes you a more attractive buyer. This gives you an advantage over other buyers when you put an offer in on a property.
  • If you’re planning shared ownership with a partner, family member or friend, you’ll be able to understand precisely what kind of mortgage you’ll need before beginning the search.

You could also use an online mortgage calculator to give you a vague indication of how much you might be able to borrow. However, it won’t be until you’ve had an offer accepted that the details would be firmed up, and you can officially start the application process.

Where do I start?

If you’re considering buying a home, looking at your credit rating is a great place to start. This is an important component of the mortgage application process because your credit score will let the lender know how you handle your debt. Your mortgage lender will look at your credit history to determine your reliability as a borrower and decide what kind of product and interest rates they’ll offer you.

It’s important to raise your credit score as much as possible to give a positive impression to the mortgage lender and give you the best chance of being accepted. However, it’s important to note that each lender has its own criteria for its borrowers; no universal rating will provide a blanket guarantee of a mortgage. Every lender is different.

Residential mortgages

How do I raise my credit score?

We’re often told that debt is a bad thing, but having well-managed debt records will improve your score significantly. Without any debt on your record, the lender has no evidence that you’re a reliable investment for a mortgage. Both a poor history and little to no history are both very off-putting to a lender. Lenders are all about managing risk - and the more reliable you seem, the better.

It’s a good idea, therefore, to build your score before applying for a mortgage. A few steps you can take to improve your score are:

  • Registering to vote
  • Taking out a credit card and keeping up with monthly payments (always use an eligibility calculator first so failed applications don’t impact your score)
  • Always making sure you pay your bills on time
  • Check addresses on old bill accounts
  • Use a credit rebuild card if you’ve got bad credit
  • Avoid payday loans 
  • Cancel unused credit and store cards

If you’re looking for further advice on raising your score, please get in touch, and we can certainly help you.

What is a decision in principle?

Although you can’t be officially accepted for a mortgage until you’ve had an offer accepted, it is possible to request a decision in principle from your preferred lender. Lenders are permitted to give you an indication of what they’d be willing to lend you, taking all your circumstances into account.

This gives you evidence to supply the seller of the property that you have the financial means to afford it, making you a more attractive buyer. In the process of providing you with an agreement in principle, the lender will check your credit score and ask questions about your income.

What is the mortgage application process like?

Once you’ve had an offer accepted, you’ll have to submit an official application to your mortgage lender. If you’ve already got a mortgage in principle, you’ll have likely gathered most of the information required.

You’ll have to provide proof of your identity, residency and income. Your credit will be checked, and they may request references from your bank and employer.

Is there a special first-time buyer mortgage in Scotland?

There are a few exciting and helpful schemes available for first-time buyers in Scotland. This includes a mortgage guarantee scheme, which is available from some banks. Some offer a special first-time buyer mortgage of up to 95% of a property’s value. You might want to look into other schemes such as the First Home Fund that help first-time buyers get on the property ladder.

The best piece of advice for a first-time buyer is to enlist the help and advice from a trusted and experienced mortgage broker. With so many options out there, it’s easy to get overwhelmed and miss things that could have ended up saving you a significant amount of money and time. The Lending Channel has helped countless first-time buyers secure their dream homes at the best mortgage rates available to them.

Looking for the right lender and the best deal

At The Lending Channel, we pride ourselves on finding the absolute best deal we can for our clients. Using our extensive industry knowledge and connections, we ensure we scope out the best offers for you. Whatever your circumstance, whatever your history, we’re here to help.

Don’t hesitate to give us a call today to discuss your particular requirements.

The Lending Channel is a member of the National Association of Commercial Finance Brokers (NACFB).
2/1 King James VI Business Centre, Friarton Road, Perth, PH2 8DY
Tel: 01738 583008 | Fax: 01738 500402

The Lending Channel are authorised and regulated by the Financial Conduct Authority.
Company number SC334818
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