First Time Buyer Mortgage Advice
Buying your first property can sometimes be a stressful and puzzling process, but getting on the property ladder the first time is an important commitment and can earn you a sense of pride, security and independence. There are several useful tips that you may wish to consider when searching for a suitable mortgage deal, borrowers should:
- Make as large a deposit as is possible in order to reduce the cost of the loan
- Not rush into making multiple applications, as it could lead to a bad credit rating
- Always assess the cost of the mortgage on a long term basis
- Compare as many mortgage deals and lenders as possible
Types of Interest Rate Deal
The most popular interest rate deals for first time buyers are:
- Fixed Rate – you will pay a fixed rate until the end of the term set by your lender. After this point the interest rate will switch to your lender’s standard variable rate.
- Tracker – you will pay a rate of interest that follows the Bank of England base rate and rises and falls in accordance with it.
It is always worth considering exactly what method of repayment you will be best suited to. The options are:
- Repayment mortgages – straight forward repayments that will include interest owed each month
- Interest only mortgages – wherein payments will consist of the interest owed each month and not the initial loan. However lenders will expect you to invest enough money to repay the initial loan at the end of the mortgage period.
Before selecting a particular mortgage deal, it is always recommended to compare mortgages from as many different providers as possible in order to get the most competitive offer available.
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