First Time Buyers

First time buyers can face significant hurdles in obtaining a mortgage. Here is our guide to improving your chances

Robert Drury


Sourcing a mortgage deal can be a struggle for first time buyers. There are a number of reasons for this.

The main factors affecting first time buyers stem from the lending problems faced by lenders following the credit crunch. Prior to 2007 many lenders offered mortgages to first time buyers for a high proportion of the property value. In some cases 100% loans were available meaning no deposit was required. Unfortunately, lenders lost money on many of these loans due to redundancies, falling house prices and repossessions.

Additionally, many mortgages were arranged on an ‘interest only’ basis meaning the debts did not reduce. With falling house prices, ‘negative equity’ (where the debt exceeds the house value) quickly followed.

So lending criteria has tightened up – a lot. Lenders want to avoid what they see as ‘risky’ mortgage lending and have taken steps to avoid attracting such business.

So how has this affected first time buyers?

Lenders see first time buyers as a greater risk because they have been unable to establish a record of sensible financial management. For example, some first time buyers even present their bank statements as part of the application process showing repeated use of  ‘Payday loans’. These are relatively small loans taken for a very short term, often up to 30 days or so, but which are charged very high rates of interest.

However, whatever the reasons they were taken out, all the lenders see is an inability to meet the applicant’s liabilities from their own income. As such, most will therefore decline to lend on mortgage. The use of Paydays loans should only be done as a ‘last resort’. Check first whether other alternatives such as an overdraft or family loan can be used instead.

Affordability

The affordability of any new mortgage is paramount to lenders (and, of course, the borrowers). Lenders aim to ascertain that any new loan will remain affordable throughout the term, as far as this is possible. They will therefore check bank statements to see your monthly income and expenditure, and repeated expenses such as loans. They will also question unusual spending patterns or irregular deposits to see if they are sustainable.

You will be asked to complete a monthly budget planner. This aims to ensure you go into a home purchase understanding what all of your monthly costs will be. If you haven’t run a household before, you may not be familiar with insurances, utilities, cost of repairs and so on.

Other considerations
  • The possibility of house price reductions means lenders need you to put down a large deposit. Some lenders offer 95% mortgages, but others require a minimum deposit of 10% or more of the price of the home. This is not easy, especially where you are already renting before trying to buy. Unless the Bank of Mum and Dad is open for business, or Grandma and Grandad are able to gift an early inheritance, possibly using Equity Release on their own property, many first timers will not be able to buy until lending restrictions on maximum loans ease up.
  • It can be hard to source high ‘loan to value’ (the proportion the mortgage represents of the property value) mortgages. To obtain a ‘95%’ mortgage your financial position needs to be squeaky clean.
  • Houses are extremely expensive! And there is always the possibility that the house you buy will be worth less than you paid for it when you come to sell. This is especially true for new-build properties which come at a premium because they have not been lived in.
  • The mortgage Regulator, the Financial Conduct Authority (FCA), has also recommended to lenders that they restrict ‘interest-only’ lending whereby no capital is payable off the loan. Whilst this is not necessarily a bad thing, it means that many cannot afford the full capital and interest repayments.
  • Any first time buyers with no provable history of addresses in recent years may struggle even more. Make sure you are registered on the Electoral Register at the Council for the home you now live in.
The Mortgage Market Review

The Financial Services Authority conducted the Mortgage Market Review, which came into force on 26 April 2014. This requires lenders to make even more stringent affordability checks, and apply ‘stress testing’ to new mortgages. This testing assesses the effect of higher interest rates and their financial impact on the borrowers. The revised lending policies will only serve to make things even harder for first time buyers, even if the changes introduced may be regarded as prudent.

So what can you do to improve your chances of getting a mortgage?
  • Keep your nose clean financially – no late or missed payments to credit agreements, and  NEVER use Payday loans. These appear on your bank statements and suggest to mortgage lenders that you cannot manage financially.
  • Check to see what the lenders will be told about your credit file. Request a copy from any of the leading credit referencing agencies – Equifax or Experian – for free. Click on the ‘Statutory Credit Report’ link on the front pages of their websites.
  • If you use an overdraft on your bank account, it is best not to have items like ‘Lottery’, ‘SkyBet’, ‘BetFred’ or other online gambling debits showing up on the statements! Lenders definitely do not like you gambling with borrowed money!
  • Get yourself on the Electoral Register (Voters Roll) with your local Council. Lenders like to see a history of where you have lived and been registered to vote as it suggests stability. Don’t assume that if you pay Council Tax at your home that you are automatically placed on the Electoral Register; you aren’t.
  • Save a deposit in an account in your name. If the Bank of Mum and Dad are helping you financially, get the money into your account at the earliest opportunity.
  • Keep all of your payslips and annual P60, plus all of your bank statements. Lenders like to see your regular income and how it gets spent. Internet statements can be a problem if they do not show your name, address and account numbers – which many don’t.
  • If you have had bad credit in the past and had a default notice or County Court Judgement, get it paid off. ‘Satisfied’ debt problems do not look as bad as ‘live’ ones.
We can help!

We can help you to find you the most suitable first time buyer mortgage given your particular circumstances. If you really stand no chance at all, we will be honest and tell you so, but also tell you what to do to improve your chances later. Otherwise, you may spend many hours trawling the various lenders on your own to find someone who will lend.

You can contact us to ask any questions or arrange a no-obligation meeting using the form below. All initial meetings are at our expense, not yours.

Andy Wilson Financial Services are proud members of the Equity Release Council
We are Preferred Traders for Equity Release by Age UK (Lincoln)
Mortgage Adviser at VouchedFor Top Rated Award

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.

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Privacy Policy

1 – General

(1.1)

Andy Wilson Financial Services Ltd (“we” “us” “our”) is committed to protecting and respecting your privacy. We are the data controller and will process your personal data in accordance with the Data Protection Act 1998 as amended or replaced by the General Data Protection Regulation 2016 and any national laws which relate to the processing of personal data (“data protection legislation”).

(1.2)

Please read the following carefully to understand our views and practices regarding Your Data and how we will treat it.

This policy applies to information we collect about:

  • Visitors to our website
  • Customers
  • Introducers
  • Suppliers

2 – Visitors to our Websites

(2.1)

We may collect and process personal data about you in the following circumstances:

  • (2.1.1) – When you complete the online contact forms on our website (“Site”) providing us with your name, address, email address and contact number;
  • (2.1.2) – whenever you provide information to us when reporting a problem with our Site, making a complaint, making an enquiry or contacting us for any other reason. If you contact us, we may keep a record of that correspondence;
  • (2.1.3) – when you visit our Site we will retain details such as traffic data, location data, weblogs and other communication data, and the resources that you access (see section 2.2.2 on Cookies below); and
  • (2.1.4) – whenever you disclose your information to us, or we collect information from you in any other way, through our Site.

(2.2)

We may also collect data in the following ways:

  • (2.2.1) – IP ADRESSES: We may collect information about your device, including where available your Internet Protocol address, for reasons of fraud protection. We may also collect information about your device’s operating system and browser type, for system administration and to report aggregate information to our advertisers. This is statistical data about our users’ browsing actions and patterns, and does not identify any individual.
  • (2.2.2) – COOKIES: Our Sites uses cookies to distinguish you from other users of our Sites. This helps us to provide you with a good experience when you browse our Sites and also allows us to improve our Sites. A “cookie” is a small text file that’s stored on your computer, tablet or phone when you visit a website. Some cookies are deleted when you close down your browser. These are known as session cookies. Others remain on your device until they expire or you delete them from your cache. These are known as persistent cookies and enable us to remember things about you as a returning visitor.We use cookies (and sometimes other similar technologies) to:
    • Monitor your use on our website and gather analytics to help us improve your browsing experience
    • Remember your preferences to personalise your visit
    • Identify whether you are signed in to our website
    • Personalise our website and display information relevant to you
    • Help us improve the usability of our website

Cookies do not provide us with access to your computer or any information about you, other than that which you choose to share with us.

  • COOKIES ON THIS WEBSITE:
    Cookie Provider Description Expiration
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(2.3)

We may use your personal data for our legitimate interests in order to:

  1. provide you with information or services that you requested from us;
  2. respond to an enquiry submitted via  our online contact forms; 
  3. allow you to participate in interactive features of our Site, when you choose to do so;
  4. ensure that content from our Site are presented in the most effective manner for you and for your device;
  5. improve our Site and services;
  6. process and deal with any complaints or enquiries made by you; and
  7. contact you for marketing purposes where you have signed up for these (see section 5 for further details).

Website Links:

Our Site may, from time to time, contain links to and from the websites of third parties. Please note that if you follow a link to any of these websites, such websites will apply different terms to the collection and privacy of your personal data and we do not accept any responsibility or liability for these policies. Please check before you submit your information to these websites.

3 – Customers

(3.1)

We will collect details such as name, address, email address, contact number, date of birth, national insurance number and financial information in order to provide services to customers. We may also receive details of credit checks undertaken where you have supplied these to us.

(3.2)

We will share customer personal information with our employees to manage our relationship with you and we will retain customer personal data for 80 years.

(3.3)

We will use your personal data provided to comply with our contractual obligations arising from the agreements we enter into with our Customers and share the data with financial institutions who can assist in the provision of financial services to customers including product providers, lenders, banks, insurers and third party para-planners (including Tenet* paraplanners).

(3.4)

We will use customer personal data for our legitimate interests including:

  • (3.4.1) – sharing personal data with Tenet* as they are responsible for the services we provide to our clients and have a legal obligation to monitor our compliance with the FSMA and Financial Conduct Authority rules. Further details regarding how Tenet will use customer personal data can be found on it’s website at www.tenetgroup.co.uk or by contacting Tenet on 01132-390011;
  • (3.4.2) – with your consent, marketing our other products and services by mail and email; and
  • (3.4.3) – with your consent, obtaining your sensitive personal data from third parties including your health, ethnic origin, or criminal prosecutions from third parties such as employers and credit reference agencies, fraud prevention agencies and other similar organisations.

(3.5)

We will not transfer any customer personal data outside the European Economic Area (“EEA”).

*Tenet  means Tenet Group Limited, Tenet Limited, TenetConnect Limited, TenetConnect Services Limited, TenetLime Limited, its associated companies.

4 – Customers

We will collect details such as contact names, address, email address and telephone number in order to contact you about goods and/or services we have ordered from you, to comply with our contractual obligations and to place further orders. We may share your personal data with our employees to manage our relationship with you and we will keep your personal data for as long as we require your goods and/or services subject to a maximum of six years from the date of our last contact with you. We will not transfer your personal data outside the EEA.

5 – Marketing

(5.1)

We may use customer personal data to provide you with details about our services, products,  business updates and events which we think may be of interest.

(5.2)

You have the right to opt-out of receiving the information detailed in section 5.1 at any time. To opt-out of receiving such information you can:

  • (5.2.1) – tick the relevant box situated in the form on which we collect your information;
  • (5.2.2) – clicking the unsubscribe button contained in any such communication received; or
  • (5.2.3) – email us at office@andywilsonfs.co.uk or call 01522-590015 providing us with your name and contact details.

(5.3)

Where you have subscribed to receive marketing correspondence from us we will keep your personal data for six years from when you subscribed to receiving marketing information from us or until you unsubscribe from receiving such correspondence from us (whichever is earlier).

6 – Legal Basis for Processing your Personal Data

(6.1)

In accordance with data protection legislation we are required to notify you of the legal basis upon which we process your personal data. We process your personal data for the following reasons:

  • (6.1.1) – for performance of a contract we enter into with you;
  • (6.1.2) – where necessary for compliance with a legal obligation we are subject to; and
  • (6.1.3) – for our legitimate interests (as described within this policy).

(6.2)

We will also process your personal data including personal sensitive data  where we have obtained your explicit consent.

7 – Disclosure of your Data to Third Parties

(7.1)

In addition to the third parties mentioned previously in this policy, we may disclose your personal data to third parties for the following legitimate business purposes:

  • (7.1.1) – staff members in order to facilitate the provision of services to you;
  • (7.1.2) – IT software providers that host our website and store data on our behalf; and
  • (7.1.3) – to a prospective buyer of some or all of our business or assets, in which case personal data including Your Data will also be one of the transferred assets.

(7.2)

We may disclose your personal data to the police, regulatory bodies, legal advisors or similar third parties where we are under a legal duty to disclose or share your personal data in order to comply with any legal obligation, or in order to enforce or apply our agreements; or to protect our rights, property, or safety of our customers, or others. This includes exchanging information with other companies and organisations for the purposes of fraud protection and credit risk reduction.

(7.3)

We will not sell or distribute your personal data to other organisations without your approval.

8 – Cross-Border Data Transfers

We do not transfer personal data outside the EEA.  Where this is required in the future, we will ensure that safeguards are in place so that such transfers comply with data protection legislation.

9 – Data Security

(9.1)

Information you provide to us is shared on our secure servers. We have implemented appropriate physical, technical and organisational measures designed to secure your information against accidental loss and unauthorised access, use, alteration or disclosure. In addition, we limit access to personal data to those employees, agents, contractors and other third parties that have a legitimate business need for such access.

(9.2)

Where we have given you (or where you have chosen) a password which enables you to access certain parts of our Site, you are responsible for keeping this password confidential. We ask you not to share a password with anyone.

(9.3)

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your information transmitted to our Site; any transmission is at your own risk.

10 – Access to, updating, deleting and restricting of your data

(10.1)

It is important that the personal data we hold about you is accurate and current.  Please keep us informed if the personal data we hold about you changes. 

(10.2)

Data protection legislation gives you certain rights in relation to your personal data. You have the right to object to the processing of your personal data in certain circumstances and to withdraw your consent to the processing of your personal data where this has been provided.

(10.3)

You can also ask us to undertake the following:

  • (10.3.1) – update or amend your personal data if you feel this is inaccurate;
  • (10.3.2) – remove your personal data from our database entirely;
  • (10.3.3) – send you copies of your personal data in a commonly used format and transfer your information to another entity where you have supplied this to us, and we process this electronically with your consent or where necessary for the performance of a contract;
  • (10.3.4) – restrict the use of your personal data; and
  • (10.3.5) – provide you with access to information held about you and for this to be provided in an intelligible form.

(10.4)

We may request specific information from you to help us confirm your identity. Data protection legislation may allow or require us to refuse to provide you with access to some or all the personal data that we hold about you or to comply with any requests made in accordance with your rights referred to above. If we cannot provide you with access to your personal data, or process any other request we receive, we will inform you of the reasons why, subject to any legal or regulatory restrictions.

(10.5)

Please send any requests relating to the above to our Privacy Officer, Andy Wilson, at 2 Claudius Road, North Hykeham, Lincoln, LN6 9PH or andy@andywilsonfs.co.uk specifying your name and the action you would like us to undertake. Note that in relation to requests to access personal data, we reserve the right to charge a reasonable fee to comply with your request.

11 – Right to Withdraw Consent

Where you have provided your consent to the collection, processing and transfer of your personal data, you may withdraw that consent at any time. This will not affect the lawfulness of data processing based on consent before it is withdrawn. To withdraw your consent please contact us at andy@andywilsonfs.co.uk or by writing to Andy Wilson, 2 Claudius Road, North Hykeham, Lincoln, LN6 9PH

12 – Changes to our Privacy Policy

We reserve the right to update this privacy policy at any time, and any changes we make to our privacy policy will be posted on this page. We will notify you if there are any changes to this policy that materially affect how we collect, store or process your personal data. If we would like to use your previously collected personal data for different purposes than those we notified you about at the time of collection, we will provide you with notice and, where required by law, seek your consent, before using your personal data for a new or unrelated purpose. We may process your personal data without your knowledge or consent where required by applicable law or regulation.

13 – Contact Us

We have appointed a Privacy Officer to oversee compliance with this privacy policy. If you have any questions, comments or requests regarding this policy or how we use your personal data please contact our Privacy Officer at andy@andywilsonfs.co.uk or tel: 01522-590015. This is in addition to your right to contact the Information Commissioners Office if you are unsatisfied with our response to any issues you raise at https://ico.org.uk/global/contact-us/

 

Last updated: 1 April 2018.

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