Can First Time buyers get an Interest Only Mortgage?
As a first-time buyer in the UK, you may be wondering whether you’re eligible for an interest-only mortgage. An interest-only mortgage can be a tempting option, as it allows you to pay lower monthly repayments initially. However, it’s essential to understand that an interest-only mortgage is not suitable for everyone. In this blog, we’ll take a closer look at the factors that determine whether first-time buyers can get an interest-only mortgage and what you need to consider before making a decision.
Why?
Interest-only mortgages were once a popular choice for borrowers looking to get on the property ladder, but they are now much harder to come by. Lenders have become much stricter in their lending criteria in recent years, and as a result, interest-only mortgages are not as widely available as they once were.
To get an interest-only mortgage, you’ll typically need to show that you have a clear repayment strategy in place. This could be in the form of an investment plan or savings account that will pay off the mortgage at the end of the term. As a first-time buyer, it may be challenging to demonstrate that you have a viable repayment strategy, making it more challenging to get approved for an interest-only mortgage.
You’ll also need to have a more substantial deposit to get an interest-only mortgage. Lenders typically require at least a 25% deposit, so you’ll need to save up a significant amount of money before you can even consider this type of mortgage.
It’s also worth noting that the UK government has introduced several changes to the mortgage market in recent years. For example, lenders now need to conduct more stringent affordability checks to ensure that borrowers can afford to repay the loan. This means that lenders are less likely to offer interest-only mortgages to first-time buyers, as they are seen as more high-risk.
However, while getting an interest-only mortgage as a first-time buyer can be challenging, it’s not impossible. By working with a mortgage broker who specializes in interest-only mortgages, you can get expert advice on the best deals available and the requirements you’ll need to meet to get approved.
At our mortgage broker firm based in Basingstoke, UK, we have years of experience in helping first-time buyers get on the housing ladder, including those looking for interest-only mortgages. We can help you find the right interest-only mortgage deal for your needs and guide you through the entire process, making it as stress-free as possible.
Finally..
In conclusion, getting an interest-only mortgage as a first-time buyer in the UK can be challenging, but it’s not impossible. You’ll need to have a clear repayment strategy in place and a more substantial deposit than for a standard mortgage. However, by working with a mortgage broker who specializes in interest-only mortgages, you can get the expert advice you need to make the right decision for your needs.
At our mortgage broker firm in Basingstoke, UK, we can help you find the right interest-only mortgage deal and guide you through the entire process, from start to finish. Contact us today to find out how we can help you achieve your dream of owning your own home.
* Your home may be repossessed if you do not keep up repayments on your mortgage
