Buying Your First Home
Specialist Advice For First Time Buyers
Getting Your Foot On The Ladder
Buying your first home is an exciting time but with this possibly being the biggest investment you could ever make it can also be a daunting proposition. With so many mortgage products in the market place it can be hard to pick which one is best for you. This can all depend on how much deposit you have for the property right through to whether you are employed or self employed? It is always advised to explore your options on affordability before finding a property to ensure you are in the very best position to buy but also understand fully how much you can borrow.
Having made a successful offer for property, your advisor will then handle all the complex paperwork, again working with the lender, solicitor and surveyor throughout the purchase to ensure that buying your new home is a thoroughly stress-free experience
For further information on how we can help you please contact us today!
Some Frequently Asked Questions
To ensure that you are fully aware and prepared to buy your first home, it is essential to get a clear understanding of the process ahead. Here at Stanford Mortgages we are on hand to guide you through this process from the very beginning!
- Find out how much you can borrow
- Find your first home
- Negotiation and getting a price agreed
- Apply for a mortgage
- Instruct a conveyancer to act for your purchase
- Arrange for a survey of the property
- Mortgage offer issued
- Sign contracts and documents for purchase
- Exchange contracts
- Complete the purchase
- Congratulations you are now a home owner!!
It is essential to ensure you are in the very best position to buy your next home prior to searching for your new home. It is therefore strongly advised you find out how much you can borrow first to ensure that if you find you next home you are best placed to make a successful offer for the property and presenting your position in the best possible light. Estate Agents have a duty of care to the sellers of the property to ensure that the buyer has their finances in place in order to proceed with the purchase. If you do not have the relevant decision in principle from your chosen lender, this may delay the negotiation process for your dream home leaving it on the market for other prospective buyers.
If you’re a first-time buyer in England or Northern Ireland, you will pay no Stamp Duty on properties worth up to £300,000. This means if you are a first-time buyer, you will save up to £5,000. For properties costing up to £500,000, you will pay no Stamp Duty on the first £300,000. For properties above £500,000 the standard rates apply and further details can be obtained from the HMRC website.
There are 1000’s of mortgage products in the market place and it can be hard to understand which could be the best for you?
Firstly there are two main repayment types to consider –
- Interest only
You pay the interest each month, with a view to repay the whole loan at the end of the term. To apply for this type of mortgage you must supply evidence that you will be able to pay the loan off when the time comes with a sufficient funds or a repayment vehicle. This type of mortgage normally has the lowest monthly repayments, however, you will pay a larger amount overall, as you are paying interest on the whole sum, followed by the lump sum repayment at the end.
One of the simplest mortgage types is the repayment mortgage which are payments made each month which combine the loan and interest payable. The full amount, plus interest, is repaid by the end of the mortgage period.
What type of Mortgage product is best for my needs?
Fixed rate: This type of mortgage has a fixed interest rate for a set period with typical period ranging from two to five years and right through to 10 years in some cases. These offer the advantage of a set repayment amount but can leave you paying more if interest rates were to fall. At the end of the fixed period you will be automatically placed on the lender’s standard rate (SVR) once the fixed rate period ends.
Variable rate: Usually the lender’s standard mortgage. The interest rate varies according to market circumstances. The Bank Of England’s base rate has an influence to how the lender set their rates but the lender ultimately controls the rates they charge.
Capped Rate: These are similar to a variable rate mortgage, but with an upper capped limit in place to the mortgage rate which guarantees that your mortgage rate will not go higher than a pre agreed rate.
Tracker: The interest rates on this type of mortgage are pinned to a base level – usually the Bank of England base rate. The rate you pay will be a fixed amount above the base rate and will change in line with the bank of England’s base rate changes.
Offset: This is a combination of mortgage and savings account. Interest is only due on the difference between your savings and the outstanding mortgage balance. A guaranteed ability to repay an amount means that the lender is taking less of a risk and can pass those benefits on.
Flexible: With this mortgage type, you can make larger repayments when it is suitable. Once you have overpaid, you can then choose to make lower payments temporarily if you need to in the future. This flexibility offers an ability to manage your repayments to suit your financial needs.