First Time Buyer mortgages

The first step to buying your home is to save a deposit. Your deposit affects the amount you can borrow. The amount you can borrow affects the house you can buy.

For example a 5% deposit on a £100,000 house is £5,000, 10% is £10,000.

It is therefore important to have a plan. Saving a set amount, each week or month is far easier for most of us to do. It may also make sense to separate your savings from your normal expenditure, and possibly limit your access to your savings account to avoid temptation.

The biggest step is to start saving, and to discuss your options our local branches are there to help.

There are a number of things to pay for when buying a house.  The main ones are explained below:

The deposit

This is the largest of the costs.  This is a lump sum you pay towards the cost of your new home.  You will need at least a 5% deposit, leaving you needing a 95% mortgage.  Together you have the total value of the house.  Saving more than the minimum of 5%, gives you a bigger choice of mortgages.

Stamp Duty or Land Taxes

You may be charged a tax when buying your house.  This depends on where you live and how much you spend.

The tax is called:

• Stamp Duty in England
• Land Transaction Tax in Wales
• Land and Buildings Transaction Tax in Scotland.

Further details can be found on www.gov.uk/stamp-duty-land-tax

Mortgage and lender fees

There are several fees to be aware of:

• Mortgage account/booking fee: this is the amount we charge for setting up your mortgage.
• Product/arrangement fee: the amount we charge for the mortgage itself, which can be added to the to the mortgage amount in some cases

Surveyor’s fee

When you visit your new property, you will of course ask many questions. You can also pay for a survey.  The Surveyor will inspect your property and tell you what they find.

If you want to find a surveyor near you visit the Royal Institute of Chartered Surveyors.

Legal fees

A solicitor or conveyancer can help you with the legal work needed to buy your home.  They handle contracts and transfer the money to pay for your home.  They will also do local searches for you.

To find a good one, ask your family and friends or check out one of the many comparison tools.

Other costs

Remember you may need to think about:

• Moving costs
• Decorating and furnishing your new home
• Council tax
• Buildings and contents insurance.
• Utility bills, your gas, electricity and water.

The main types of mortgages are:

Fixed Rate

With Fixed Rate mortgages, your interest rate stays the same for an agreed period of time specified in the product name.  Eg 3 Year Fixed Rate Mortgage.

Until that date, you can plan your finances safe in the knowledge that your repayments will not be affected by a change in interest rate.

Discounted Variable Rate

Discount mortgages are variable rate mortgages. They are called ‘Discount’ mortgages because the interest rate charged for the initial term is a discount from our Standard Variable Rate (SVR). As the Society’s SVR can increase or decrease, so can the monthly amount you pay. However, the discount from the Society’s SVR will not change unless your interest rate meets the collar rate.

Discount products offered by the Darlington Building Society are ‘collared’, meaning that while the interest rate may increase, it will not fall below the ‘collared’ rate. Following the initial term, your product will revert onto our SVR.

SVR

Our standard Variable Rate (SVR) mortgages are available up to 85% loan to value (70% maximum loan to value for interest only loans) in England, Wales and Scotland.

You can make unlimited lump-sum repayments plus, if you are unsure what the future holds, you can redeem the mortgage at any time.

What is the First Homes scheme?

First Homes is a new scheme designed to help local first time buyers and key workers onto the property ladder, by offering homes at a discount of 30% compared to the market price.

Who is the scheme for?

Local first-time buyers and key workers

What is the eligibility criteria?

• Purchasers of First Homes must be first-time buyers and must have a household income not exceeding £80,000 and £90,000 in London (or lower if set by the local authority)
• Post-discount price caps on first sale of the property of £250,000 across England and £420,000 in London (or lower if set by the local authority)
• A First Home should be the buyers only home and a purchaser will need to use a mortgage or home purchase plan for at least 50% of the purchase price of the home
• Local connections and/or key worker status as determined by the relevant local authority

Where will First Homes be built?

First Homes will be built across England.

Newton Aycliffe is the latest to unveil the first 12 cut-price houses on the Elder Green development.

Read how Darlington Building Society are supporting the First Homes scheme here.

A Decision in Principle (DIP) simply confirms how much we would be prepared to lend to you. Sometimes, an estate agent may ask to see your DIP before they will let you view a property.

The Loan to Value (LTV) is the percentage of borrowing you take out against your home. For example, if you have a mortgage of 150,000 and your home is worth 200,000, you have an LTV of 75%.

If we accept your mortgage application, we will send you a mortgage offer, which includes details of the mortgage we will provide, any amounts and charges added to the mortgage, the mortgage term and the conditions of the offer. We can withdraw our offer at any time up to completion. The mortgage offer is an important document, which you must read carefully.

For more Mortgage FAQ’s visit the Tips, Tools and Support page.