First Time Buyers
If you are buying a property for the first time, it can be a daunting prospect. Your mortgage will probably be the most important financial decision you ever make, with the wrong decision costing you thousands of pounds over the life time of the loan.
With current market conditions, many are finding it harder than ever to finance their home and it is becoming more of a challenge to get on to the property ladder. Mortgage lenders have had to adapt their products and lending criteria, and as a result some lenders have increased the amounts they are prepared to lend, subject to affordability. Lenders have also increased the maximum mortgage term from the norm of 25 years to in some instances 40 years.
When looking for your first mortgage, there are certain things you should be aware of:
Very low interest rates
You may have found a mortgage rate of 2% or 3%, a word of warning, to get the initial low interest rate, you are usually forced to accept an uncompetitive standard variable rate for a set number of years after the initial low rate period ends. This extended tie in not only could cost you more in interest charges, if you wanted to get out of the deal early, you could face penalty fees running into thousands of pounds.
Higher lending charge
If you put down a deposit of 5%, the loan to value (LTV) percentage is 95%. Some lenders will add a charge for mortgages that exceed a certain level of LTV, which can add an extra £3000 on a borrowing of £100000, depending on your chosen lender. Not all lenders charge this fee, this is another reason for getting independent advice.
As you can see, the mortgage market may appear to be a minefield, but with the help of David Pickering of IFAS, you have the opportunity of navigating your way through, to find an affordable deal which suits you. Please feel free to contact me, and take your first step toward buying your desired property.
Your home may be repossessed if you do not keep up repayments on your mortgage.
For mortgages we can be paid by commission or fee. If paying by a fee this is typically 0.5% of the loan.
