First time buyer mortgages
As a first time buyer, it is important to ensure that you receive the best advice on finding and securing the most competitive mortgage deal available to you. Your mortgage will probably be the most important financial decision you ever make. The wrong decision could cost you thousands of pounds over the life of your loan.
There are currently around 2,000 different first time buyer mortgage deals available, provided by over 40 UK lenders. It is of great importance to obtain independent advice from a fully qualified independent mortgage advisor, who works for you and not the lender.
How much can I borrow?
Property is still a gamble, even though most people make money on their home. This is why it can be dangerous to borrow too much. No matter how attractive owning rather than renting a property is, buyers should beware of becoming financially overstretched.
Some lenders will offer up to five times’ the applicant’s salary and some 100% of the property’s value. However, the Financial Services Authority recommends that single people should borrow up to a total of three times’ salary and two and a half times’ salary for couples. Use our mortgage calculators to find out how much you are able to borrow and to get a likely cost of your new mortgage.
What deposit will I need?
Although 100% mortgages do exist, most lenders will require at least a 5% deposit. If you can come up with 10%, you are likely to be offered a better deal, as you are seen as lower risk.
What type of mortgage?
Most first time buyers will choose a repayment mortgage. Endowments are largely dying out in the wake of a mis-selling scandal – thousands of homeowners are now facing a shortfall because their endowment policy will not cover their mortgage account balance.
No one knows what will happen to interest rates and so a competitive discounted or fixed rate can be a good deal in the longer term. American’s have been able to choose from very long term fixed rate mortgages (the same rate for 20 to 25 years or more) for some time now although this kind of product isn’t as popular in the UK.
An interest only mortgage can be good if you want to keep your repayments low. Remember though, that you are never repaying the mortgage debt. After paying only the interest for 25 years, you will then have to repay the whole amount that you initially borrowed. If you didn’t take out a repayment vehicle, such as an endowment policy or a pension, you will probably have to sell your home to repay the lender. In this scenario, you might as well rent a property, as home ownership can be expensive and any money that you spend on repairs and up-keep would have been paid for by your landlord.
How to receive your free mortgage illustration
Experienced, qualified advisors who arrange the best mortgages available handle all enquiries. They have access to every UK mortgage lender and will only approach the lenders who can offer you the best deal, saving you time and money.
To receive your free mortgage illustration, you just need to enter some basic information into our mortgage enquiry form and your advisor reply within 24 hours with details of the best mortgages available from the whole marketplace. Remember there’s no obligation, no credit checks will be performed without your consent and there are no brokers fees to pay.
Or if you prefer, you can call a fully trained mortgage advisor on 0845 490 0419. It will only take a few minutes of your time today but could save you thousands of pounds in interest payments and will eliminate any worries you may have about getting the best deal possible.