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Gary has been providing advice to clients on their mortgage needs for over 10 years. He has extensive experience in providing advice and recommendation on all types of mortgage including high net worth purchases, new build purchases, self-employed, contractor and adverse credit. Clients working with Gary can expect a straight-forward honest and highly personalised service.
Gary Boakes
Director and Mortgage advisor
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Who is classed as a First Time Buyer?
A First Time Buyer is anybody that has never owned a property previously. However, there are lenders that will class you as a First Time Buyer if you haven’t had a mortgage in the last three years. So it can differ with some lenders, but generally, if you’ve never owned a property before, you’re a First Time Buyer.
How do joint mortgages work for First Time Buyers?
It’s basically where two people buy the property together. They put their income together to fund the mortgage. Their income and expenditure will be used jointly to determine how much they can borrow.
It means you can borrow more than if you took a mortgage on your own, and you share the costs jointly – survey costs and solicitors, for example. That’s the same whether you’re a First Time Buyer or a home mover – there’s no real difference in terms of how a joint mortgage works.
My partner is a First Time Buyer but I’m not, what are my options?
This is an interesting one, because actually this applied to my wife and me. When we bought our first house together, she was a First Time Buyer while I had previously owned.
From a mortgage perspective, it didn’t change anything. It might have meant that with certain providers we might not have been able to get some of the First Time Buyer benefits. Some lenders will give you cash back if you’re a First Time Buyer – so we lost that opportunity.
If one of you has owned a property previously, you will lose those First Time Buyer rights, unfortunately. But in terms of how you buy property and how we look at your mortgage, it’s no different.
Do both buyers have to be First Time Buyers? Do couples lose First Time Buyer status if one partner bought in the past?
You don’t have to be First Time Buyers – from a mortgage perspective it makes no difference. But yes, if one partner has bought in the past the couple does lose First Time Buyer status.
My wife still curses me for that because there are certain implications, which I’m sure we will discuss later. But if I’d bought a property in the past but hadn’t had a mortgage for three years, some lenders would class us both as First Time Buyers again.
That three year mark can be quite important with a couple of lenders out there. But yes, you do lose First Time Buyer rights with most lenders.
Do I have to pay stamp duty if my partner is a First Time Buyer but I’m not?
This was what I was alluding to and why she wasn’t very happy with me. Yes, if you are buying with someone that has owned a property before, you do lose First Time Buyer status for stamp duty. You would have to pay whatever stamp duty applies as a home mover.
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We do not charge our customers for any mortgage advice we are purely paid by the lender on completion.
What does being joint tenants or tenants in common mean?
As joint tenants, you own the property with equal rights. Let’s say I buy property with my wife as joint tenants, it means we legally own the property 50-50.
If you choose tenants in common, you can change the ownership rights. You can have differing shares – it may well be that I own 60% and my partner owns 40%. That’s the difference between the two.
As joint tenants it’s all set in stone, while as tenants in common you can change the shares.
Can I get a mortgage with a guarantor?
Yes, you can. Guarantor mortgages have changed slightly, basically due to the stamp duty rules for second properties. Anybody that buys a second property now will usually have to pay an additional 3% stamp duty charge.
That’s one of the big things that has changed, and guarantor mortgages have now become what’s called Joint Borrower, Sole Proprietor mortgages. These let you buy with someone and get away from that stamp duty element.
So yes, we can get a mortgage with a guarantor but it’s slightly different from what you’d traditionally think of as a guarantor mortgage.
How much deposit do I need?
You can buy property with a 5% deposit – anything over 5%, you’re generally absolutely fine. There is a 100% mortgage out there, where you can buy property with no deposit at all. Skipton has something called a track record mortgage, which basically looks at someone that has rented previously and has a borrowing calculation based on what their rent was.
So technically, you can actually buy property with no deposit – but those deals are very few and far between. In most instances you need a 5% deposit as a minimum to buy property.
How much can you borrow as a First Time Buyer with a joint mortgage?
It’s all based on your income and expenditure. Lenders look at how much you earn compared to how much your debts are on a monthly basis. They also look at whether you’re buying as a single person or jointly. It can really differ based on that.
People always say that you can borrow about four and a half times your income – and that will give you a really basic idea if you want to work it out. But actually there are so many other things to take into account – loans, credit cards, children, travel to work etc.
So it’s quite complex and obviously that’s why mortgage brokers are here to help – we help you work out what you can and can’t do from an affordability point of view.
We work with dozens of lenders including the high street banks and can compare their deals for you, always with your best interest at heart.
What is a Joint Borrower Sole Proprietor Mortgage?
Joint Borrower Sole Proprietor is a type of mortgage where not all parties are legal owners of that property – that is the key part to it. It means that you don’t have to pay the second property stamp duty.
Let’s say for instance I buy a property and with my dad. We get the mortgage together and the affordability is based on both our incomes and expenditure. It takes into account my dad’s property and his mortgage payments.
But I will be the only legal owner of that property. I’ll be on the title deeds but my dad will not – and that’s why you don’t pay the stamp duty. Legally, on the title deeds he is not the homeowner. We just used his income to achieve affordability on that property.
There is a little more legal work to do with these types of mortgages because your parents, brother or sister or whoever is coming on that mortgage with you, has to understand that they have a legal responsibility for the mortgage but don’t own the house. They have to go and get legal advice to explain those circumstances to them.
They’re great mortgages and we do quite a lot of them. It can be a great way for a First Time Buyer to get onto that ladder with a little help from a family member.
Can you transfer a joint mortgage to one person?
Unfortunately we get these quite often, mainly due to separations or divorces. People have bought a property jointly and one of them wants to own that property outright by buying out the other person.
You can do it, but the lender will basically want to look at your affordability – can you afford that mortgage with one income? That can be the real downside to it. When we look at separations and divorces, often the only reason they could buy that property was due to your joint affordability. If you take one of those incomes away and the lender feels you can’t afford it on your own, you might not have many options.
In that case, the mortgage would have to stay in joint names until the property was sold. But lenders are getting a little bit better with this. Some lenders are very good and will offer an increased income multiplier, especially if you can show you’ve been paying that mortgage for a substantial period of time on your own.
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How do you calculate a First Time Buyer joint mortgage?
If you come to us as a customer we would work out what your income is and talk to you about your expenditure – and the lenders will have affordability calculations based on that. Affordability will slightly change with every lender, depending on your income and commitments.
The deposit you’re putting in can also have an effect on how much you can borrow. We use the same affordability calculators that the banks use, with more detail, and the borrowing figure we will get should be very accurate.
The information we’re putting in those calculators needs to be correct, so we base it on your payslips and bank statements and what you’ve told us from your credit file.
How can a mortgage broker help me get a joint mortgage as a First Time Buyer?
The advantage of using a broker is getting a clear picture. If you’ve got complicated income or overtime, we work out what income the lender will use. That sometimes is the hardest thing for people, where something is slightly unusual within their circumstances.
Lenders are very different. Certain lenders will take your pension payments into account, while others don’t – our job is all about deciding which lenders to go to and who will be best suited to your set of circumstances.
I’ve been in this game a long time now and I’ve bought properties myself – so we have a really good idea about what you should be looking for on Rightmove and how you can use it to help you. For example, you can look at sold house prices, for a good indication of whether a house is worth what it’s on the market for. It helps you decide what you should be offering on that property.
Usually you go to a broker because you need to know what you can afford. You then go to your estate agents to find a property. We can also guide you on solicitors – we can offer a lot more than just telling you how much you can borrow and what it will cost.
I’ve worked in an estate agency as an advisor, and previously I ran my own business. Plus, I’ve been a First Time Buyer, so I can offer support and guidance on the whole process. If that means you save £5,000 on the offer price and get a great mortgage deal, that’s what it’s all about.
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