Is this your first-time dealing with mortgages? At The Mortgage Library, we help spell it out for you and provide support right up until you get the keys to your new home.
We are your jargon busting, market leading brokers, guiding you every step of the way from start to finish.
We are first time buyer specialists
The FCA does not regulate estate agents and we act as introducers for them.
If you do not have the money to buy a property, you will need a mortgage which is a large loan, in order to do so.
Banks and building societies are lenders who will loan the money to you, providing you meet their lending criteria and you will pay interest on that loan.
The loan will be paid back over a period, from just 5 years to 40 years, but you will still own the property, not the lender.
If you borrow the amount needed over a short period of time, i.e. a short-term loan, then you may pay less interest than one that is a long-term loan. This is where mortgage advice from The Mortgage Library is invaluable, as our brokers will explain the mortgage term that is best for you.
Before you can get a mortgage, you will need to have an amount of money that you can use to make an initial payment up front before the mortgage commences. This is what is known as the deposit and it often needs to be at least 5% of what you are paying for the property.
The larger the deposit you can pay means the smaller the loan will be over the mortgage term.
The Mortgage Library advisor will be able to explain that you can secure a loan with a lower interest rate if you have a large deposit available to use.
Our Mortgage Library broker will also calculate the amount of deposit you will need.
There are several types of mortgage loans and our first time buyer mortgage advisor can explain them to you in detail.
With a repayment mortgage, part of the loan as well as interest, is paid back to the lender, monthly. In this way, at the end of the term of the mortgage, there will be nothing left to pay. This is the mortgage most often offered to a first time buyer.
There used to be wide use of an interest only mortgage. The monthly payments may be much lower because only the interest on the loan is paid back monthly and none of the original purchase price, the capital, is paid back.
At the end of the mortgage term, therefore, the capital amount is still owed and is outstanding. For this reason, it is more difficult to get this type of mortgage as you will need to have been paying for an insurance policy that guarantees to pay the outstanding capital, alongside of your monthly payments. You can, of course, sell the property and pay back the loan and hope that the sale price achieved gives you equity you can use towards your next property.
There are mostly two types of mortgage rates that are applied, and these can be described as Fixed Rate Mortgages and Variable Rate Mortgages.
A Fixed Rate Mortgage means that the interest rate you pay will be fixed for a certain period, usually between 2-5years. This means that as the banks’ interest rates change and go up or down, yours will remain the same. This rate may be helpful to you as you will know exactly what you must pay over that period.
In contrast, a Variable Rate Mortgage will be affected by whatever the Bank of England’s current rate of interest is. If it is raised, so will your interest rate go up. If it is lowered, your interest rate may come down too.
The free initial and best advice from The Mortgage Library advisor is so useful in deciding what rate is best for you, as you can see that the decision is tricky if you have no idea of the market forces behind the rise and fall of the mortgage rates.
AS A FIRST TIME BUYER, IT IS IMPORTANT TO KNOW THAT THE NUMBER OF MORTGAGE APPLICATIONS YOU MAKE TO DIFFERENT LENDERS WILL AFFECT YOUR CREDIT RECORD, ESPECIALLY IF YOU GET TURNED DOWN.
Even if you make the application online, or go to a Bank directly, be sure that the information you give is accurate to the best of your ability. Using The Mortgage Library broker with their best mortgage advice will ensure your best chance of a positive response as they will not submit your application until every avenue has been discussed.
Whilst deciding on the best mortgage for you as a first time buyer, you must remember that your mortgage will be secured against your property.
This means that if you get into payment arrears, your lender is entitled to repossess your property.
If you have taken out a mortgage with The Mortgage Library, our advisors will help in any way they can to resolve difficulties you may have but do not leave it too late before seeking advice as there may be a solution for you that can change your situation.
When you are looking for a property to buy and find one that you might like to offer on, you will be asked by the Estate Agent if you have a Mortgage In Principle (MIP).
This term refers to a document that you will receive from your lender when it is agreed, in principle, that they will offer you a mortgage loan. The Mortgage Library broker can obtain this for you. This offer, however, is not the formal mortgage offer, as all background and financial checks will not have been carried out by the lender at this stage.
Once you have decided which property you wish to buy and your offer has been accepted, The Mortgage Library broker will put the formal application through to the lender that they, with your help, decided was best for you.
There are First Time Buyer Government mortgage schemes out there which might help you.
If you only have a 5% deposit, there is a scheme called: - Help to Buy
There are also schemes known as SHARED OWNERSHIP with various HOUSING ASSOCIATIONS in which you share the ownership of the property with the housing association. In this way, you only need a deposit for your share of the property.
When a property, worth over £125,000 is purchased, the Government levy a tax called ‘Stamp Duty Land Tax’, often just known as 'Stamp Duty'.
If you are a First Time Buyer, the Government will waive the Stamp Duty on a property worth less than £300,000. If the property is worth over this amount but less than £500,000, there will be a 5% tax on the amount between £300,000 to £500,000. You may find our stamp duty calculator helpful.
A big boost to the First Time Buyer is Government help with Stamp Duty.