By Bridget Carter

So you’re serious about buying a home and you think you have enough money together to take the plunge into the property market?
One of the things you are undoubtedly going to need is a mortgage. It might be that you go straight to your bank and make an inquiry about how to obtain one.

But what you need to remember when it comes to borrowing money is that there are many different money lenders to choose from and many different types of mortgages you can obtain.

This is why you really need to shop around to make sure that you are getting yourself the best deal. On offer is such a wide variety of loans, including special mortgages for graduates and mortgages for professionals. There are guarantor mortgages, joint mortgages with your parents and the list goes on.

It is even more important than ever to make sure you are paying out the least amount of interest as possible on your loan. That is because the costs connected to making your first home purchase have rocketed by 94% in six years. They are increases have had a large impact on those trying to get their foot on the property ladder.

Consider these numbers. In the year 2000 people only needed an average of £4,698 to pay for things like stamp duty, mortgage fees and solicitors’ bills. But in 2006, the costs almost doubled to become £9113. So when it comes to raising a deposit on your home you can see how much more difficult it has become.

And for this reason, some wanting to purchase their first property might not even have enough money to pay for the deposit on their house.
There are some money leaders out there willing to loan money for people to pay for their deposit.

Your money lender may offer you a mortgage package that includes the deposit as part of the overall package, but be careful of this.
A major disadvantage is that if there’s a crash in the property market you could wind up owing more than you borrowed, often known as negative equity.

Also be wary about over committing to a mortgage. If you cannot keep up your mortgage repayments you may wind up in court trying to fight to keep your house so that the banks or the money lenders do not take it from under your feet.
This may happen if you have a credit history is not that positive in the first place because money lenders will make you pay more on your interest rates than others if, in fact, they loan you money at all.

If you are in the fortunate position where you have the money to put down a large deposit, it might be worth baring in mind that the more money you put down on a house as a deposit, the less interest you may pay on your mortgage.
Usually people pay up to 10% of the total cost of the property as a deposit. For example, if you were to purchase a £100,000 house, you would pay £10,000 up front.

When you go to your bank or money lender, they will consider things like your disposable income and existing loans before deciding whether or not to give you a mortgage.

Whatever your decision, make sure you shop around and take the right advice. Factor in fees for your mortgage interest rates because while a company may quote ‘typical rates’ for a mortgage, the exact rate that you pay will depend on your personal circumstances.

There may be many routes available for you. More and more lenders are launching mortgages specifically designed to help out first-time buyers. The possibilities are almost unlimited.

More Mortgage FAQ’s
More Mortgage Articles

Technocrati Tags[mortgages]