How Buying Your First Home in Scotland Works

The home buying process in Scotland differs from England and Wales, particularly around the information available before an offer and the point at which the agreement becomes legally binding.

Types of Mortgages for First Time Home Buyers in Scotland

Government Schemes to Support First Time Buyers in Scotland

There are government schemes in place that first time buyers in Scotland can apply to, which makes getting on the property ladder much more achievable.

Further Help for First Time Buyers in Scotland

Luckily, there’s also a lot of other help available for first time home buyers in Scotland.

Guarantor Mortgages

Guarantor mortgages for first time buyers work a lot like a Joint Borrower Sole Proprietor mortgage in that a relative helps you out with buying a property. To use a The Joint Borrower Sole Proprietor mortgage, a relative joins you on the mortgage, this is most commonly a parent helping out a child. This boosts your borrowing power, giving you the edge to get the property you want.

Guarantor mortgages focus more on help toward a deposit than with the affordability of the property. To get more information on a joint borrowing mortgage, it’s best to speak to an advisor to see if it’s the right fit for you.

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What Are the Best Ways to Make Sure You Qualify for Your First-Time Buyer Mortgage in Scotland?

Experian and Equifax are the most commonly used credit reference agencies. Use these to access your credit score and credit report. 

You will need to register with them, which is free to do for the first 30 days. There is a monthly subscription charge set up automatically once you register to access the information you need. Pro tip: gather the financial information after you register and then simply cancel your account.

If your credit score is poor, there are a few things you can do to improve it:

• Make sure that you’re registered on the electoral roll at your current address.
• Having no, or very little, credit history actually makes it harder to get a good credit score.
• Show that you can borrow and repay money reliably.

All of this is to show your lender that there is little risk involved in giving you the substantial sum needed to purchase your new property.

Simple ways to improve your credit score:

• Use a credit card for food or fuel
• Buy small products or services with your credit card, things that are easy to pay off
• Make full repayments monthly

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First Time Buyer Mortgages in Scotland FAQs

What is a mortgage in principle?

Based on your income and outgoing expenses, a mortgage in principle is the maximum amount a lender is willing to let you borrow. Interest rates can affect this as it is not a binding agreement, so use it as a guide only.

When do you need to remortgage?

As a first time buyer, you’ll usually get better interest rates for the first term of your mortgage. The initial period will be 2,3 or 5 years and within that time interest rates remain fixed. When the term ends, it’s time to remortgage. This is when you begin to look around once more (or let us do the hard work for you) to find the best rates for your next term.

Can you get a first time buyer mortgage if you’re self-employed?

Yes, there are just a few extra steps to consider. The main issue you’ll come across when getting a first time buyer mortgage in Scotland if you’re self-employed is needing to prove your income. The rules are a little stricter in this instance, you’ll need to show two years’ worth of tax statements or accounts data, and these must be undersigned by an accountant. This will show lenders that you have a constant, stable income stream.

It is best to obtain all of this documentation before starting the mortgage process, having the documents beforehand will make it much easier to proceed swiftly.

Can I use a gifted deposit?

Yes, many lenders accept deposits gifted by family members. You will usually need a signed declaration confirming the money is a gift and not a loan.

How long does the process take in Scotland?

The timeline can be slightly quicker than other parts of the UK due to earlier legal commitment, though this depends on the property and solicitor timelines. A typical purchase may take several weeks from offer to completion.

What are the most common mistakes first time buyers make in Scotland?

Some of the most common issues include:

• Not having a mortgage in principle before offering
• Underestimating LBTT and legal costs
• Offering over budget in competitive areas
• Not understanding how quickly missives become legally binding

Preparing early can help avoid delays or failed purchases.

Can I pull out after my offer is accepted?

In Scotland, once missives are concluded, the agreement is legally binding. Pulling out after this stage can lead to financial penalties. It is important to be fully confident before proceeding.

What happens if the property is valued lower than my offer?

If the lender values the property below your offer price, they will base the mortgage on the lower valuation. You may need to increase your deposit to make up the shortfall.

Does getting a mortgage in principle affect my credit score?

Some lenders use a soft credit check, which does not affect your credit score. Others may carry out a hard check. It is important to confirm which type is being used before applying.

Do I need protection when taking out a mortgage?

When taking out a mortgage, building insurance is mandatory, that your lender will insist on in place. You are not always required to take out other forms of protection, but it is strongly recommended. A mortgage is a long-term financial commitment, and protection helps safeguard your ability to repay it.

Common types include:

• Life insurance
• Income protection
• Critical illness cover

The right combination depends on your personal circumstances.