Wanting to buy your property, or a property you like the look of, can be daunting at first. Especially for first time buyers as it has the aspect of feeling more mature and completely becoming an adult. The idea is fantastic. The process? Not so much. Being armed with the right knowledge is key when it comes to securing your first mortgage and ensuring you get the best deal that is right for you. Once you have the information you need, the process will not appear so frightening.
• Past three years of address history
• Last three months’ payslips and your last P60
• Three months’ worth of bank statements
• Make sure you are on the electoral role
• Check your credit score, make sure you are on top of any credit card repayments
Once you have this information in order, you can approach a lender and request a mortgage. Lenders want know that whoever they are lending money to can pay it back and are not committing fraud (Getting on the electoral role).
Speak to a mortgage broker
For those who are completely in the dark about mortgages and how to go about requesting one, mortgage brokers can provide in-depth information. They can help you find the deal that is right for you and arrange it for you. They will only recommend the deals that are right for you while helping you with the application. Some brokers have exclusive access to deals which include lender-direct deals. However, before you consider this option, you should check the brokers’ credentials. All brokers are regulated by the Financial Conduct Authority and if they do not appear on their register, they are not authorised to provide advice.
You do not need a massive deposit to secure a mortgage. Most mortgages nowadays require a deposit of at least 5% of the property value. Saving a larger one will widen the choices of mortgage deals. If you feel you have not got enough money for a deposit, most loan brokers can provide the best deals on short-term loans as well as debt solutions (Should you need it!). However, this option is not suitable for everyone and they can guide you on the best solutions.
What type of mortgages are there?
There are two types of mortgages to choose from, consisting of ‘Variable rate’ and ‘Fixed Rate. The variable rate is on that can with the interest rate changes. A standard variable rate will change in line with the Bank of England Base Rate. This may all seem daunting and confusing for first time buyers, as long as you know the basics, you are one step ahead.
Fixed rates stay fixed for a set period of time, if the Bank of England base rate rises; a fixed rate will not be affected and can save you money in the long run. Other mortgage rates include; Tracker, flexible and discount. It is advised to ask about these with a mortgage broker or your banks financial advisor.
In conclusion, mortgages can be a daunting prospect. If you are prepared with the right knowledge and information, you can be well on your way to owning your dream home. Ensure that you shop around for deals and seek as much advice as possible.
By Harry Price
Harry Price is a talented young man, not only is he a great writer but he plays football for his local team and bass guitar in a local rock band.