5 Myths About Buying Your First Home
Buying your first home is one of life’s biggest milestones, but it’s also surrounded by plenty of myths that can make the process seem more daunting than it really is. The good news? Many of these common misconceptions are no longer true.
Myth 1: You Need a Huge Deposit
One of the biggest myths about buying your first home is that you need to save a large deposit before you can even think about applying for a mortgage. Whilst having a bigger deposit can offer more options, there are now several schemes available that make homeownership far more achievable for first-time buyers.
No Deposit Mortgages
The Skipton Building Society Track Record Mortgage allows eligible first-time buyers to purchase a home with no deposit, making the dream of owning your own home possible – sooner than you think.
If you’ve been renting for at least 12 consecutive months and have a strong history of paying your rent on time, you may be able to borrow up to 100% of the property’s value, helping you get onto the property ladder much sooner than expected.
Benefits include:
- No deposit required
- Fixed interest rate for the first five years, providing payment stability
- No guarantor or family security needed
5% Deposit Mortgages
Many lenders now offer mortgages with just a 5% deposit, making it easier than ever to buy your first home without years of saving.
The Government has previously supported low-deposit lending through mortgage guarantee schemes, and a new permanent scheme is expected to continue improving access to affordable mortgages.
Benefits include:
- Lower upfront costs
- Faster access to the property market
- Available to many buyers, not just first-time purchasers
Lifetime ISAs (LISAs)
A Lifetime ISA (LISA) is one of the best ways to save towards your first home.
Available to anyone aged 18 to 39, a LISA allows you to save or invest tax-free, with the Government adding a 25% bonus to your savings.
Key features include:
- Save up to £4,000 each tax year
- Receive up to £1,000 Government bonus annually
- Withdraw funds tax-free to purchase your first home or after the age of 60 for retirement
If you’re planning ahead, a LISA can significantly boost your deposit over time.
Myth 2: Renting Is Better Than Buying
Renting can sometimes seem like the cheaper option, but it’s important to think about the long-term picture.
When you buy a home, each mortgage payment helps build equity. Over time, as you repay your mortgage and your property’s value potentially increases, you’re investing in your own future rather than someone else’s.
With renting, your monthly payments cover the cost of living in the property, but they don’t build any equity for you.
Owning your own home also offers several lifestyle benefits:
- Greater stability and security
- Protection from unexpected rent increases or tenancy changes
- The freedom to decorate, renovate and personalise your home without needing permission
While buying isn’t the right choice for everyone, for many it can offer both financial and lifestyle advantages over time.
Myth 3: New Build Homes Are More Expensive
Many buyers assume that new build homes cost more to own, but that’s not always the case.
Modern homes are built to much higher energy-efficiency standards than older properties. Features such as improved insulation, high-performance windows and solar panels can significantly reduce household energy bills.
Some estimates suggest homeowners could save between £700 and £1,500 per year on energy costs when compared with an older property.
New Build Warranties
Most new homes include a builder’s warranty covering the first two years, along with a 10-year structural warranty for major defects.
Because everything is brand new, from the boiler to the kitchen, you are also less likely to face costly repair bills during the first few years of ownership.
For many first-time buyers, this provides valuable peace of mind.
Green Mortgages
If you’re buying a home with an Energy Performance Certificate (EPC) rating of A or B, you may qualify for a Green Mortgage.
Many lenders, including Nationwide, Barclays and Halifax, now offer products that reward buyers of energy-efficient homes.
These incentives may include:
- Reduced mortgage interest rates
- Cashback when purchasing or remortgaging an energy-efficient property
With more than 90 Green Mortgage products currently available, buyers have more choice than ever.
First Homes Scheme
The First Homes Scheme offers eligible buyers the opportunity to purchase selected new-build homes at a 30% to 50% discount.
Priority is often given to local first-time buyers, key workers and those whose incomes would otherwise make homeownership difficult.
Myth 4: You Need a Perfect Credit Score
Many first-time buyers believe they need an excellent credit score before a lender will even consider their mortgage application. While your credit history is important, it isn’t the only factor lenders look at.
Mortgage lenders also assess:
- Your income and employment
- Your monthly outgoings
- How well you’ve managed existing credit
- The size of your deposit
- Whether you can comfortably afford the mortgage repayments
Even if your credit score isn’t perfect, there may still be lenders and mortgage products available that suit your circumstances. Speaking to a mortgage advisor can help you understand your options and identify the most suitable lender & product for your situation.
Myth 5: Getting a Mortgage Is Too Complicated
The mortgage process can seem overwhelming when you’re buying your first home, but with the right help and guidance, it’s often much simpler than people expect.
A mortgage advisor can help you:
- Understand how much you could borrow
- Compare mortgages from a wide range of lenders and help you get the best rate
- Explain the buying process from start to finish
- Manage the application and paperwork on your behalf
- Liaise with lenders, estate agents and solicitors throughout the purchase
Buying your first home doesn’t have to be stressful. With the right advice and preparation, you’ll know what to expect at every stage, helping you move into your new home with confidence and ease.
We recommend Meridian Mortgages, a new-build mortgage specialist with access to approximately 90 lenders and 11,000 products.
Contact our friendly Sales Executives today to find out more information about how we can help, and to arrange a call from the experts at Meridian Mortgages.
Lingey Close, Sacriston – 07519 328128
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Horsley Park, Gainsborough – 01427 857324