Did you know that a deposit is the biggest thing you need to save for in the home buying process? This can seem a bit daunting if you’re a first time buyer, especially if you’re not sure how big of a deposit you need or how to save for a deposit.
We’ve put together the ultimate guide on first time buyer mortgage deposits to get you on your way to homeownership, written especially with middle income earners in mind. Covering why a deposit is so important and what to do if you haven’t saved enough, this guide will help you put together a plan for saving for your first home.
Taking out a mortgage to buy your first home is one of the biggest – if not the biggest – financial decisions you’ll ever make. But it’s also one of the most rewarding. Finally, after saving for so long and renting in the city you love, you get a place to call your own.
Having said that, you have to go through the mortgage process first, which can be really confusing. With jargon and paperwork coming at you left, right and centre, understanding what it all means can be a lot to get your head around.
In this blog, we’re helping you get to the bottom of your most pressing questions about first time buyer mortgages, including offers, withdrawals, extensions and the best lenders.
What is a mortgage offer?
Not to be confused with a mortgage in principle (MIP), also known as an agreement or decision in principle, your mortgage offer is what you’ll receive from the lender after they’ve approved your application.
Your mortgage offer includes details like:
The amount of money the lender will loan you
The interest rate (fixed or variable)
Estimated monthly repayment amount
The length of time you’ll repay the mortgage
Any fees due for taking out the mortgage
Specific conditions attached to the mortgage
How long the mortgage offer is valid for
You’ll usually receive your mortgage offer two to four weeks after submitting your application. To prevent any delays in the application process, it’s important to make sure all the information on your application is accurate, and you provide the relevant paperwork, including:
Pay slips
Bank statements
Proof of deposit funds
ID
Tax forms/accounts (if self-employed)
Reasons why a mortgage offer may be withdrawn
Your lender has the right to withdraw the mortgage offer at any time up to the completion date. There are several reasons this could happen, including:
Mortgage offer expiry
A mortgage offer is valid for a set period – usually up to six months – but this varies depending on the lender. If completion doesn’t take place within the time specified in the offer, the lender may withdraw. But there is a way around this (more on that below), so you won’t necessarily have to reapply.
Credit report changes
Your lender will carry out credit checks as part of the mortgage process. This includes a ‘hard’ search after you submit your application and before you receive an offer.
Afterwards, they may conduct additional checks to make sure your credit hasn’t changed significantly. If it has, due to missed payments or new debts, the lender may decide to withdraw your mortgage offer.
Misleading information
The lender will also conduct due diligence to make sure your property purchase is above board, like checking that there’s no fraud and that your funds are from legitimate sources. This is why it’s so important to be completely honest on your mortgage application; any discrepancies between the information on your application form and the supporting documents could cause the lender to withdraw the offer.
Change of situation
Sometimes, unexpected things happen, and circumstances change. For example, a job redundancy or drastic changes to your monthly outgoings. Depending on the severity of the situation, it could result in changes to the mortgage terms or withdrawal of the offer.
Property issues
Sometimes, further conveyancing checks on the property bring to light issues not originally flagged. For instance, flooding issues or structural damage, which might result in the lender withdrawing the mortgage offer.
Can you get an extension on a mortgage offer?
The process of buying a home can be long-winded and complicated. There will inevitably be bumps in the road, from construction delays (if it’s a new build) to legal hold-ups. Don’t worry, though, because mortgage lenders understand this and, in most cases, are happy to extend a mortgage offer beyond the initial agreed period. The length of the extension will depend on the lender, and they may request proof of bank statements to check your financial circumstances haven’t changed since the original agreement.
We recommend contacting your mortgage advisor or lender directly if you want to discuss an extension of your mortgage offer.
Who are the best mortgage lenders for first time buyers?
The best mortgage lender for you depends entirely on your financial circumstances. In the first instance, it’s always wise to speak to an Independent Financial Advisor (IFA), as they can guide you through every step of the process, from finding a lender to completing your application.
We recommend using Censeo Financial as an IFA when buying with us, as they know exactly which lenders offer mortgages on Pocket homes.
Hopefully, you’ve found this guide to mortgage offer withdrawals and extensions helpful. For more information about stepping onto the property ladder, check out our first time buyer guide, which details the process of buying a Pocket home from start to finish.
If you’re not quite at that stage but still interested in owning your own home, create a My Pocket account to check your eligibility, register for available properties and stay up to date on our latest developments.
We strongly believe that communities should have a say in the housing being built on their doorstep. Here at Pocket Living, we aim to build more homes that are actually needed, helping middle earning Londoners get onto the property ladder and put down roots in their local areas. A lack of affordable homes shouldn’t be the reason that people leave their communities, so we campaign every day to get permission to build more discounted homes across London.
What you may not realise is that we rely on the support of local communities to put through successful planning applications. If you live in a borough where we’re trying to build more discounted Pocket homes, your voice could have a big influence on whether we get permission to build. With that said, it’s important to demystify how the planning system works so that you can understand how to support planning applications should you decide to do so.
Read on to find out how to support homes being built in London in a few simple steps.
When the Government announced the First Homes policy, Pocket Living welcomed the ambition. The premise of the policy is identical to what we have been doing for years, namely opening up homeownership to young middle earners by selling at a discount.
The onset of the pandemic in the spring of 2020 quickly lead to the withdrawal of low-deposit mortgages, as property valuations ground to a halt and lenders looked for ways to manage business levels.
Over the last 12 months, the market has gradually opened up again, and the budget announcement in March saw the Government confirm its intention to support the housing sector by increasing the availability of 95% mortgages.
Here, we have broken down how the government’s mortgage guarantee scheme works.
Packing – one of the most dreaded aspects of moving home. Luckily, there are things to consider when packing for a move so that you can take a smart approach and streamline your efforts.
We’ve put together a packing checklist for moving home to take all the guesswork out of it. Start by gathering the moving supplies you’ll need, and then work systematically until the job is done. Read on to find out more.
Our design team is clever – they understand that sustainability goes hand in hand with creating quality homes for modern living. Minimising waste and maximising efficiency is at the heart of what they do; they focus on inventive use of space and efficient planning so that real value is returned to our buyers.
Each of our developments is completely unique, with the team spending a lot of time getting the eco credentials up to scratch – from the methods of construction used to the paint on the walls. Our latest development in Barking, Harbard Close IG11, is a great example of a sustainable housing development in London. Read on to find out more about it.
It is officially summer, and we are happy to report that a new batch of Pocket residents have moved into our first development in Wanstead – Gardner Close E11. These affordable Pocket homes are exclusively occupied by first time buyers who live or work in Redbridge, making it an extension of the wider community. Right around the corner from Wanstead Station and Wanstead High Street, they have easy access to a range of local amenities.
Pocket developments are unique because they are filled with like-minded city makers who have often struggled to afford to buy a home in London. With so much in common, we have already seen friendships form amongst neighbours at Gardner Close, and we cannot wait to see the community spirit build as they all get settled in. Read on to find out how we welcomed them to their new Pocket homes and what they are getting up to!
Finding a good local café is important, and we think the best ones combine location, atmosphere, and, of course, great coffee. To help with your search, we’ve compiled a list of the best up and coming cafés in Croydon, all a stone’s throw away from our Addiscombe Grove CR0 development. Some are colourful, some are cosy, but all of them live and breathe the spirit of Croydon, which is why we love them.
East London has a lot to offer, with certain areas becoming increasingly desirable due to rapid regeneration. A vibrant borough that we’re keeping an eye on is Barking and Dagenham, which is seeing significant growth in the arts and cultural sectors and an influx of jobs and new homes. More and more young people are moving further eastwards in search of affordable homes, so we’re pleased to have built a development for first time buyers right in the heart of this exciting borough!
