With mortgage rates moving as much as they have over the last few months, it has never been more important to get good and timely mortgage advice – no matter where you are in your home-buying journey.
Navigating the current environment on your own can be daunting, however many don’t know where to turn for advice, or even what they would ask a broker.
In fact, new research from Moneybox found that three-quarters* (76%) of aspiring first-time buyers have yet to consult a professional broker.
Here are the top five questions any aspiring home buyer should ask their broker right now – and why.
1. Can I get a mortgage now?
There is no doubt that the environment has changed for first-time buyers over the last 12 months. It’s hard to turn on the news without hearing about volatility in interest rates and the housing market.
It is very important to look beyond these headlines though. Don’t assume that just because you hear about mortgage offers disappearing or first-time buyers struggling, that this necessarily applies to you.
There is still plenty of activity in the market at the moment and many first-time buyers getting the keys to their dream home on a weekly basis.
A broker will be able to look beyond the headlines, assess your circumstances and let you know what is actually available to you in the market.
2. What do the changing mortgage rates mean for me, and what can I afford?
When you seek professional advice from a broker, they will help you find out what mortgage deals are available to you and are affordable given your circumstances.
For the last decade we have been used to interest rates being low and staying low. The last 12 months have been a wake-up call and it’s a great time to be taking advice from your broker about what is affordable for you, both now and if rates rise further in the future.
You don’t want to be unnecessarily under pressure if interest rates soon after you get your keys.
A broker will do a comprehensive and detailed affordability assessment with you and then scan the whole of the market and find the most appropriate mortgage deal at the best rate.
3. How much should I save beyond the deposit?
You have saved up your deposit, great news! However, there are other costs to consider saving for such as stamp duty, solicitors’ fees etc. A professional broker can help you get an overview of these additional costs.
There will also be costs after you’ve bought your home, such as energy bills, council tax and kitting out your new house, and these need to be built into your savings plan.
A broker will be able to help you understand all the additional costs you need to be aware of and create a plan for how you can save towards them.
As part of the budget planning process at Moneybox we always ensure customers have a certain amount of disposable income following all the costs of the house purchase itself. We usually recommend an additional two to three months’ worth of expenditure as a sensible amount.
4. What can I do NOW to help speed up the mortgage process when I’m ready to buy?
First-time buyers can really get a head-start by getting organised for their purchase six to 12 months ahead of their anticipated purchase date.
This means getting your finances in order, paying off any high interest debt and making a budget planner for pre and post house purchase.
Speaking to a mortgage broker six months before you plan to buy can help you get advice on how to make sure your finances are in the best place possible for your mortgage application.
They can also start preparing you for the paperwork and documents you will need in order to apply. This will make it significantly less daunting when the time comes to buy.
Even earlier in the home buying process, brokers can help you explore products that could boost your deposit savings such as the Lifetime ISA.
With a Lifetime ISA, you can pay in up to £4,000 per year and you get a 25% government bonus on all savings. That means for every £4 you save, you get £1 for free.
If you pay in the maximum of £4,000 you’ll receive a £1,000 bonus. Over time, these bonuses could give you a real head start.
5. Finally, don’t be afraid to ask ALL the questions
Mortgage brokers are employed to help you understand everything you need to know in the saving and home buying process and help you along that journey towards getting the keys to your first home.
However, the reality is that as a first-time buyer there will always be new terms and jargon along the way that you haven’t encountered before.
Buying your first home can be a very stressful process and likely the biggest purchase you will ever make.
It is important to try and understand all the steps invovled, so don’t be afraid of asking questions about anything that might be unclear to you
It’s our job to help you understand everything, beyond daunting media headlines and jargon, and help you on your home-buying journey – with confidence.
Cecilia Mourain is MD of Moneybox Home-buying, which was voted best app for first-time buyers at the What Mortgage Awards
