Ok, everyone understands what a first time home buyer is but we are often asked about second time buyers; so here we go…
If you have previously owned a property but do not do so at the moment, and you want to buy a new property, then you could be classed as a “second time buyer” for mortgage purposes. (If you want to know about getting a second property, while keeping your first home or Getting a second mortgage which are different, click on those links )
Second time buyer status has certain pros and cons.
If you sold your previous property and made a profit then hopefully you will have saved this money to be used as a deposit.
The bigger the deposit you have the better; firstly because your monthly repayments will be less and secondly because mortgage lenders look more favourably on people borrowing a smaller proportion of a property’s value – called the loan-to-value (LTV).
The smaller the LTV you need, the more competitive the deals available to you.
Also, if you kept up with repayments on your previous mortgage your credit record will reflect this and make you a good bet for lenders.
However because a first-time buyer is generally defined as someone who has never previously owned a property – and you have – you are unlikely to be eligible for specific first-time buyer deals.
These could be either FTB mortgages or shared ownership schemes specifically designed to help people get their first foot on the property ladder.
However, bear in mind that some lenders regard people who have been absent from the property ladder for three years or more as a first-time buyer so it is worth shopping around.