First Time Buyer Guide

'I can’t wait. My house. My own home. The very first place I can call mine, all mine. I want to get my foot on that property ladder and start painting my home all the colours under the sun. I want it to look like me, feel like me, have ‘ME’ written all over it in great big letters. So, any chance you could help me do it?'

If anyone can do it, we can. Because at Bradford & Bingley we really do look at things from our customer's point of view. That’s why we’ve got mortgages for all kinds of people, in all kinds of circumstances. Including first-time buyers like yourself. So together there’s every chance we can get you sorted and into that home of yours, sharpish.

The home buying journey

Okay, you probably don’t realise it, but you’ve already taken the most important step towards buying your first home – making the decision to do it. From here on in we can guide you every step of the way. It’s what we do. Take a look at these 10 steps to buying your first home and remember, you’ve already done number 1. Easy wasn’t it?

1. Decide to buy a home. Done that, next
2. Find out what you can borrow. Roughly speaking, you can borrow up to 3.25 times your salary , although we may let you borrow more.
3. Find a home. You know your budget and how much you can borrow. You've got no home to sell, so you can move quickly. Happy hunting.
4. Put in an offer. Gulp! The scary bit. Make a realistic offer and remind the estate agent that as a first time buyer you can move quickly.
5. Choose a mortgage. We’ll talk you through your options and help you pick the right one for you.
6. Grab a conveyancer or solicitor. Getting one lined up early shows you’re serious and can avoid delays later.
7. Get the property valued. Your mortgage lender (that’s us) will arrange this. We need to make sure that the property is worth what we’re lending you. For an extra fee, you can get a homebuyer's report which will provide detailed information and identify any faults.
8. Do some paperwork. Your solicitor will send you all the necessary forms and contracts for you to sign. Then exchange them with the seller's paperwork. At this stage you’ve committed to buying the home. And they’ve committed to selling it. Bravo.
9. Move in. Oh yes, the best part of all. Your solicitor transfers payment to the seller and registers your title at the land registry. You’ve done it. The home is yours. Feel free to look incredibly smug.
10. Party. Okay, not an essential step in the home-buying process, but a house-warming party is a great way to bond with your new home. Plus, all your friends will be itching to come around and have a nosey.

How much can you borrow?

There’s actually a very simple way to work it out. Roughly speaking, you can borrow up to 3.25 times your salary. If the figure falls short, don’t give up. We have a range of options to help you out including higher income multiples.

What costs are involved?

In addition to your monthly mortgage payments, which are determined by the size of your loan, the interest rate and term. Here are the main costs of buying a home:

• Mortgage arrangement and valuation fee. To check the value of the property - from £334, although we've even got options with no upfront fees to pay.
• Product fee. This fee covers the cost to us of offering your interest rate or deal.
• Mortgage arrangement and Homebuyer survey (optional but recommended). To check the general condition of the property - from £499.
• Full structural survey. A more in-depth survey - £800+. Usually only required if a problem is highlighted in the mortgage valuation.
• Stamp duty. Government tax - ranges from 0%-4% of the property’s purchase price if it’s more than £125,000.
• Legal fees. Payable to your conveyancer or solicitor. Includes land registration fees and local search fees, though we do have some options where there are no basic legal fees to pay. 

The mystery of mortgages - unraveled

Mortgages are our specialist subject. We can talk for hours about them. But don’t worry, we won’t. We’ll just give you all the information you need to help you choose the right one, in a way that doesn’t make your head explode.

The 5 basic mortgage types:

1. Variable. The standard mortgage type. So called because the rate can change.Your payments can increase or decrease.
2. Fixed. You guessed it, the rate stays the same. For an agreed period (usually between 1-5 years) your payments stay the same. We also have deals where you can fix your mortgage payments for up to 10 years.
3. Capped. A less popular choice that we don't currently offer. This is a variable rate mortgage that won’t rise above a certain level, for an agreed period of time.
4. Discounted. This is basically a variable rate mortgage that offers a lower rate for a promotional period. Making your initial payments much easier to manage.
5. Tracker. As the name suggests, this type of mortgage tracks the movements of a benchmark rate, like the Bank of England’s base rate. Your rate will go up and down with it.

'Which one is the best for me?'

Until we’ve had a good chat, it’s impossible to say. Some people like the certainty of a fixed rate. Others like the possibility of their payments going down and so choose a variable rate.

When we've help you choose which type of mortgage you want, you then decide how you want to pay it. There are two ways:

1. Repayment. With a repayment mortgage, each month you pay a bit off the loan,as well as the monthly interest. At the end of the term you owe nothing.
2. Interest only. With interest only your payments are lower, but only cover the interest on the loan. So at the same time, you pay into an investment fund, which is used to pay off the capital when the term ends. 

Protection for you and your family.

If you have concerns, don't worry, you’re human. Taking on the largest loan of your life is a big responsibility and over the years, we’ve heard just about every ‘what if?’ there is. That's why we try to protect our customers against them.

Here’s an outline of the different types of mortgage cover available.

Critical illness cover. Basically, if you do die before your mortgage is paid off, life cover (also called life insurance) should cover the remaining debt for you.This is definitely worth having, especially if you have dependants or a partner. Some lenders may insist on you having it. This type of cover is designed to pay out a guaranteed sum of money if you fall critically ill and are unable to work.

Income protection. If you can no longer work due to an accident or sickness, income protection can provide you with an income for a period of time.

Accident, sickness and unemployment. This covers your mortgage payments for a limited period if you’re made redundant, fall ill or have an accident.

Home insurance. Buildings Insurance covers the cost of rebuilding your home in the event of structural problems or a disaster. Contents Insurance covers your possessions against loss, damage or theft.

We have the expertise to help you sort out any of these types of cover, and have various options available to suit you and your family’s needs.We'll even save you all the time and hassle of sorting cover out as we'll do it as part of your mortgage appointment.