First Time Buyer Mortgages
Buying your first home is a big deal, possibly more so now than at any other time and bearing in mind that you have never done it before, it’s difficult to know where to start.
You have probably got a rough idea of the type of property you’d like to buy, you may have already seen some you like – you may even be thinking about how you would like decorations and furnishings.
Before you go any further, just take a break and have a look at our short guide, before you get too carried away.
You first area of consideration should be affordability, and by that, I don’t mean what any prospective bank or building society would consider as affordability – that is just a calculation based on what information you provide them and that will come later, I am talking about what you can comfotably afford as mortgage repayments.
There is very little point in stretching yourself to breaking point financially to buy that exotic penthouse suite with all mod cons as you’re unlikely to enjoy it much if all you do is worry about how you are going to meet the mortgage repayments.
So, first and foremost, have a good look at your expensses – credit cards, loans, food, travel the lot, then think about the expenses you are going to acquire – council tax, home insurance, redundancy insurance, utility bills etc not forgetting to allow for any possible interest rate fluctuations.
The Money Advice Service provide a comprehensive free budget planner.
You will know what kind of deposit you have saved up, usually, in terms of getting a mortgage – the bigger the better. The less you want to borrow on a mortgage, the less of the risk to the lender and often the better the deal you can get as far as interest rates are concerned.
However, in general terms, the minimum deposit you will require is 5% of the purchase price of the property you want to buy – particularly with the Government’s Help to Buy scheme.
Just before you rush off to the nearest estate agent, there are few other costs you will need to think about associated with buying your property.
- You may have to pay a mortgage booking fee (can be up to £250) whenb you apply foryour mortgage
- You will have to pay a valuation/survey fee which can vary dependant on the purchase price of the property and the type of survey you require.
- Then there are the legal costs which could easilly be in excess of £500
- If your property is over £125,000 there will be Stamp Duty to pay
- Moving costs.
Make sure you account for everything (including putting something aside for the unforseen) before you rush off the the estate agents.
Now that you’ve got all that worked out, and you’ve decided that you have enough of a deposit and enough income, you can start to look for your mortgage.
Generally speaking, there is no such thing as a first time buyer mortgage – if you fit the lenders criteria, you’ll get a mortgage.