First-time Buyer
Mortgages

A decision in principle (DIP) (also known as an agreement in principle (AIP)) is a statement from a mortgage lender that says, based on an initial assessment of your financial situation, they are likely to lend you a specific amount.  

It's great to have a DIP in place before you start house hunting. It gives you a better idea of how much you could borrow, helping you budget correctly in your property search. Some estate agents will even want to see that you have a DIP before you view a property, as it shows that you’re a serious buyer. Consequently, having a DIP can put you in a better position of have your offer on a property accepted over other house-hunters without one.  

It’s important to note that a DIP is not a full mortgage offer. A DIP only involves an initial check of your circumstances. The full mortgage application includes a hard check of your credit, a detailed assessment of the property, a thorough review of your finances, and many other factors.  

Our brokers can help you secure your decision in principle. Get started here. 

Yes, some lenders offer products at 95% LTV, meaning you’d need as little as a 5% deposit to purchase the property. However, these types of rates and the associated fees (like the lender arrangement fee) can be more expensive. The more deposit you can put down, the more likely you’ll be able to access more competitive mortgage rates.  

You’ll need to have the following documents ready when applying for a mortgage:  

• Proof of identity – A valid passport or driver's license 
• Proof of address – This can be utility bills, bank statements, or council tax statements dated in the last 3 months 
• Proof of income:  
  • If you’re employed, your last 3 months’ bank payslips and P60 
  • If you’re self-employed, you need 2-3 years of accounts or SA302s from HMRC. Read here for more information about getting a mortgage when you’re self-employed 

• Bank statements – Usually the last 3 months, showing your income, spending, and savings 
• Deposit details – You’ll need to evidence where your deposit is coming from (e.g., savings or gifted from family)  
• Credit commitments – This could be any loans, credit cards, or finance agreements 
• Proof of bonuses or commission  

This list is not exhaustive, but it gives you a good idea of what you’ll need to provide as a standard. 

It might sound simple, but submitting all your documents correctly and in one go is one of the easiest ways to boost your mortgage application. It helps avoid delays later on, where lenders might come back asking for more information, which can cost you time and money.  

Working with a broker means we will review your full application before submitting it. With our experience, we can quickly recognise what lenders are looking for and anticipate the questions they might raise. Answering these in advance should speed up the process for you.  

SDLT relief for first-time buyers in England and Northern Ireland

For first-time buyers, there is a reduced rate for SDLT. To be eligible, there are three main conditions you must meet:

1. You (and the person you’re buying with if it is a joint purchase) must not previously have owned any residential property in the UK. Nor can you have owned a partial share in a residential property.

2. The property must cost £625,000 or less

3. You must intend to live in the property

Stamp Duty rates for first-time buyers

If the property you purchase is over £625,000, you cannot claim the first-time buyer relief and must pay standard Stamp Duty rates.

For example, if you purchase your first house for £500,000, SDLT would be payable on:

• 0% on the first £425,000 (£0)
• 5% on the final £75,000 (£3,750)

Total SDLT to pay = £3,750

First-time buyer relief Scotland

As of 1st April 2021, first-time buyers in Scotland benefit from an additional £600 tax relief when purchasing a residential property.

The relief has the same impact as increasing the current 0% rate threshold from £145,000 to £175,000.

Before you can exchange and complete on your home purchase, your will need to have a buildings insurance policy in place as a minimum requirement. We highly recommend you take out comprehensive home insurance as well to cover both the property and the contents. Speak to a member of our expert team to find a suitable home insurance policy for you.