Information For 1st Time Mortgage Buyers

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Types of Mortgage:: Variable rates Mortgages: - mortgage payments are calculated by your lender on the so-called "Standard Variable Rate". This is based on the monetary "base rate" that is reviewed monthly by the Bank of England.
Where Can I Buy a Mortgage?: Many, but not all financial services companies offer mortgages. If you are looking for a mortgage the traditional approach is to speak to you bank or a building society. However, you are most likely to find the cheapest deals by speaking to a Mortgage Broker.
Can I Take A Break From Making My Mortgage Repayments?: The ability to take a break from mortgage repayments is a feature of the Flexible, Current Account and Offset mortgages.
What Happens If We Have A Joint Mortgage, But One Of Us Wants To Leave?: This area of the law is an extremely complex one – and it all depends on who is the legal owner of the property. You can read about this matter further on http://england.shelter.org.uk/advice/advice-469.cfm
What are 100% Mortgages?: Most mortgage lenders will only offer a 90% loan to value, that means that they will only loan you 90% of the properties value. First time buyers find this particularly problematic because they need to save up there 10% of the properties value before they can complete on their mortgage.

Your first mortgage will be the most significant financial undertaking of your life so far, but how exactly do you go about getting a mortgage?

More importantly still, how do you go about getting the right mortgage ?

1st time buyers often rush into taking out a mortgage, many of them without any advice to help them make the right choices. Today’s mortgage market is extremely competitive with thousands of different products available from hundreds of providers. Choosing the right mortgage is difficult even for a trained advisor, never mind a 1st time mortgage buyer!

Please ensure that you read all of the information below before applying for a mortgage!

Borrowing Limits

The total amount you can borrow will depend on your income. Usually lenders use multiples of 3.25 times the gross salary of a single borrower.

A couple can get 3.25 times their main income plus one times their second income. Some lenders will allow you to take 2.5 times your combined income.

Loan To Value

Some lenders will only lend you a set percentage of your property value, this reduces the chance of the property being worth less than the amount you borrowed should you default on your payments.

Stamp Duty

You also have to pay stamp duty, which is 1% of the purchase price for properties between £60,000 and £250,000, 3% up to £500,000, and 4% over that amount.

Surveys, Legal fees, Arrangement Fees and other costs

You will have to pay for the survey, the valuation of your property, and the solicitors fees. All of these add to the cost of your mortgage. Check your mortgage offer as some lenders will provide some of the necessary surveys and check ups as part of your mortgage offer.

Mortgage Indemnity

A Mortgage Indemnity Guarantee is insurance covering the lender against you defaulting on your payments when your property is worth less than the current loan.

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