Buying your first home is something many of us dream of and we’ve been sharing our top tips on how to do this through social media – but just in case you missed any here they are again:
- Consider opening a Help to Buy ISA or a Lifetime ISA.
- Location is key! You can do up the home but you can’t change where it is
- Save as much as you can – check out our blog on this if you haven’t already!https://themortgageexchange.wordpress.com/2017/04/05/smartsaver/
- Make sure your credit score is as good as it can be – again we have a blog on this! https://themortgageexchange.wordpress.com/2017/04/07/credit/
Plus there are even more handy tips on our website http://www.themortgageexchange.co.uk/mortgages/first-time-buyer/
So we’ve given you our tips. You are loaded with information to help you with your house buying journey (no matter where you are in it). Still got questions? See if it’s answered below where we have compiled a list of questions and answered.
Q. What is the difference between going to an independent mortgage adviser and going straight to the lender?
A. If you go to an independent broker they can advise you on all the products on the market and advise you on the best deal from there. Whereas, if you go directly to the lender they will only be able to advise you on their products. A broker will also be able to deal with all the paperwork for you. However, if you go direct to the lender they will ask you to provide it all yourself.
Q. What other costs are involved in getting a mortgage?
A. You already know that one major upfront cost is the deposit which you will have saved but there are other costs to take into consideration.
Arrangement fee: This is a charge for setting up the loan. The average is around £1500 but it can be added to the loan instead of paying it up front. You just need to be aware that if you add it to the loan then you will paying interest on that as well.
Valuation fee: This is something that the lender does to make sure the property is worth what you are paying for it. They arrange this for you but it often comes at a cost (around £200-£400).
Survey: This is an optional cost, although it is recommended that you do so as this is an independent survey which you arrange to check whether there are any problems with the property.
Stamp duty: If you buy a property over £125,000 then you will need to pay this. The amount which you have to pay depends on the value of the property you are buying . You can use this stamp duty calculator to work out how much this will cost you https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
Land registry fee: This is a fee which the government charges for registering a property with a new owner. This is typically between £200 and £500.
Removals: Unless you plan on moving everything in your own vehicles or know a ‘man with a van’ then you may want to a hire a removal company. The costs of which will vary.
Home Insurance: You must have buildings insurance in place on your property as this is required by the mortgage lenders. This can be paid monthly though. We recommend that you take out contents insurance at the same time to protect your belongings. We will be able to advise you on this too.
Q. What is the typical process of buying your first property?
A. We know there can be a lot to take in and the process can be a bit confusing if you have never done it before. That’s why we have created this flow chart to talk you through our process. Click on the link below to view (the first link a word doc and the second is a PDF).
Q. How big does my deposit need to be to get the best deals?
A. Although mortgages are available with a 5% deposit deposits of 25% and upwards are much more favourable to lenders. Therefore, you are likely to have access to better deals. But no matter what size your deposit is we will endeavour to secure you the best deal at a price you can afford.
Q. I don’t understand the mortgage jargon. What is a fixed rate?
A. The interest rate on a fixed rate mortgage does as the name suggests – it stays fixed/the same. In terms of what this means for you – it means that your mortgage payments will remain the same every month for the duration of the fixed rate product you have gone for (this will usually be for 2 or 5 years).
Still have questions or ready to move forward? Talk to us and allow our experience to put you at ease.