Getting a mortgage for the first time can throw you in to a scary world with lots confusing financial terms and language.
Lots of things have changed in the mortgage market since the recession but mortgage availability is at an all-time high so it may not be as difficult as you thought. Interest rates are falling too so it may be a great time to look for a new deal for your current mortgage too.
You should start by thinking about the cost of the sort of property you would like and the size of mortgage you need.
Have a look online to look at the properties in the area you are interested in or contact us so that we can tell you a bit more about the properties available and their price range.
Generally, for residential properties you will need a deposit of at least 10%.
However, you will find if you are able to save a deposit of 15 or 20%, the interest rate will be lower.
For buy to let properties you should aim for a 25% deposit however there are products available with 20%.
Remember to also budget for stamp duty, fees and moving costs too.
We work with a team of independent mortgage advisers who we have carefully vetted before recommending to clients.
If you would like to speak to someone about how much you will be able to borrow for a mortgage, how much deposit you need,
how much a mortgage would cost you or anything else let us know and we will get someone to contact you.
For both residential and buy-to-let mortgages there are several types of products:
Fixed – you fix your interest rate for 2, 3, 5 or 10 years to protect you from interest rates rising.
If they did rise during the fixed period your rate would stay the same (and therefore your monthly payment).
However if you wanted to remortgage or redeem that mortgage in that time you would normally have to pay a penalty.
The majority of residential mortgages are fixed.
Variable – your mortgage rate is variable and could rise or fall depending on the product. These products tend to not have a tie in period.
Offset – a type of mortgage where you can use your savings to reduce the amount of interest you pay without losing access to the cash if you need it.
It works by keeping your cash savings in a savings account linked to the mortgage account.
While the money is in there the mortgage balance is reduced and the interest calculated accordingly.
Tracker – an interest rate that can rise or fall in line with base rate changes with a tie in period.
You can start gathering together the documents you will need. Your lender may want to see any or all of the following:
· Your last three months' bank statements
· Your last three months' pay slips
· Proof of bonuses/commission (P60)
· Your last three years' accounts or tax returns (SA302s)
· Proof of deposit (for example statement of the account the deposit is in)
· Gift Letter (if a family member is giving you the deposit you will also need a letter from them)
· Proof of ID (photo ID such as passport) and proof of address (driving licence or utility bill)