While getting on the property ladder can sometimes seem like an impossible task, recent research has shown that the number of first-time homebuyers has reached a 10-year high.
Even if you have everything in place for buying, there are lots of things to consider before you’re ready to settle into your dream home. Don’t panic though, the money experts at comparison site MoneyGuru.com have some top tips to make the process as stress-free as possible.
What is the typical mortgage term?
The standard length of a loan is 25 years but the term can be longer or shorter. Increasingly, buyers are taking out mortgage for 30 or even 35 years. The loan is secured against the value of your house and if you can’t keep up your repayments, the lender can repossess your home and get their money back.
What deposit will I need?
Normally you’ll have to save between five and 25% of the value of a home. For example, if the house costs £125,000 you would need a minimum five per cent deposit of £6,250. An online mortgage calculator can help you work out how much you’ll need.
Top five tips for wannabe buyers
Put as much of a deposit down as you can
While you might only need to put a minimum of a five per cent deposit down, if you’re in a position to put more down then you really should. Putting a larger deposit down will open up more products for you to choose from and give you a better chance of securing cheap interest rates.
Be aware of additional costs
Unfortunately the deposit and the mortgage aren’t the only costs associated with buying a house. Other fees you might have to pay out for are: solicitor’s fees, mortgage valuation fees, stamp duty, survey costs and removal costs. Be wise and make sure you have money set aside for these extras.
Be aware of monthly repayments
Use online mortgage payment calculators to set a realistic and affordable monthly repayment amount. It’s important to be realistic and take into account bills and living expenses. Lenders will go through your outgoings with a fine-tooth comb to make sure you can afford the payments, so make sure you tell the truth – it will be better in the long term.
Do your research
It might seem obvious but you really need to do your research when looking into a first home mortgage. There are plenty of schemes out there that can make it easier for you to buy your first house including affordable house schemes, help-to-buy and shared ownership.
Check your credit rating
Having a poor credit score will affect the amount you are able to borrow with a mortgage. Make sure you’re in control of your finances and know exactly what your credit score is well before you plan to apply for a mortgage. This will give you plenty of time to have any mistakes corrected or, if you’re in a spot of financial bother, to improve your score.
What Mortgage has teamed up with London & Country to offer you expert advice on the right mortgage deal.
Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.
