Information For 1st Time Mortgage Buyers
Your first mortgage will be the most significant financial undertaking of your life so far, but how exactly do you go about getting a mortgage?
More importantly still, how do you go about getting the right mortgage ?
1st time buyers often rush into taking out a mortgage, many of them without any advice to help them make the right choices. Today's mortgage market is extremely competitive with thousands of different products available from hundreds of providers. Choosing the right mortgage is difficult even for a trained advisor, never mind a 1st time mortgage buyer!
Please ensure that you read all of the information below before applying for a mortgage!
The total amount you can borrow will depend on your income. Usually lenders use multiples of 3.25 times the gross salary of a single borrower.
A couple can get 3.25 times their main income plus one times their second income. Some lenders will allow you to take 2.5 times your combined income.
Loan To Value
Some lenders will only lend you a set percentage of your property value, this reduces the chance of the property being worth less than the amount you borrowed should you default on your payments.
You also have to pay stamp duty, which is 1% of the purchase price for properties between £60,000 and £250,000, 3% up to £500,000, and 4% over that amount.
Surveys, Legal fees, Arrangement Fees and other costs
You will have to pay for the survey, the valuation of your property, and the solicitors fees. All of these add to the cost of your mortgage. Check your mortgage offer as some lenders will provide some of the necessary surveys and check ups as part of your mortgage offer.
A Mortgage Indemnity Guarantee is insurance covering the lender against you defaulting on your payments when your property is worth less than the current loan.
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