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Claiming Your First Mortgage Claiming Your First Mortgage...
Apart from the death of someone very close or divorce the
most traumatic thing that we contend with in our lives is
moving house and if you are a first time buyer and having
to wade through the whys and wherefores of the mortgage
world it can just be too baffling and bewildering (remember
that mortgage in French actually means death guarantee!)
But take heart, moving into your first home is also one of
the most exciting and exhilarating moments of your life.
When you start thinking about buying you'll need to study
the market to know what you can afford. We all want the
prettiest house which is probably just a little too
expensive. Look at the long term vision. Why is one house
likely to appreciate much more than another? Make decisions
through your head rather than your heart! Whilst you're
looking, take time to give yourself a budget and to start
saving. If in doubt, always buy into a location rather than
the specification of the property.
The more substantial the deposit you can save the more
thankful you will be long term. Most banks like a ten
percent down payment but whatever you pay leave yourself a
little behind. There will be quite a few hidden costs like
a survey (well worth the cost), stamp duty and lawyer's
fees that you need to be prepared for. Some places will
offer one hundred or even one hundred and twenty five per
cent mortgages (the extra is to carpet and furnish the
house). Although these are very tempting, you need to be
aware of the hidden costs. People are taking a huge risk if
they are prepared to give you such a lot of money and
you'll find the interest will probably be considerably
higher than on a conventional loan. You'll also be required
to sign a Mortgage Indemnity Guarantee (a MIG) which will
further increase your repayments. As these mortgages are
usually only offered on brand new houses, they can be very
tempting but you need to weigh up what the company is
committing you to against the profit you are likely to make
when you come to sell.
Work out how much the monthly repayments will be and check
that you can comfortably pay this and enjoy a reasonable
standard of living. Always keep in the back of your mind
(and a savings account) the prospect of a rainy day
Your decision as to what type of mortgage is right for you
will depend where you are on your own career path and how
secure your job is. It will also depend on just how much of
a risk taker you are. For instance, a fixed rate mortgage
will give you the chance to know exactly what you payments
will be for the whole of the term, whereas if you gamble on
a variable rate you could have some good months where
repayments are low followed by some lean times when the
rates rise.
Although it's a complete minefield you need to ask
questions and shop around for good deals because they vary
so widely. It really is worth looking at a range of
reputable lenders as it could save you thousands of pounds.
When you do eventually sign, check that there aren't
penalties if you want to move to an alternative lender
before the term finishes.
Jason Samuel is the editor and webmaster of
"A Wise Mortgage".
A major home mortgage and mortgage
information site on the Internet. For more information
please visit A Wise Mortgage
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