Mortgages for first time buyers
Most people know how important it is to choose the right type of mortgage when buying a house since home loans last for a very long time. There are different decisions to be made, like the type of loan and how long would you like to have the mortgage for (e.g. 15 – 30 years). These two decisions will hugely affect the monthly premium you are going to pay. If you haven’t bought a house before, here is a simple guide filled with valuable information to help with the mortgage selection process for first time buyers.
1. Set the bar on how much you can pay – before deciding to buy a house, you should know your budget and set a finite amount of how much in your budget are you willing to pay for the mortgage. Mortgages are regularly paid monthly. Use a calculator to determine how much you earn and how much you normally spend; any excess money from that can be used to pay your mortgage.
2. Start Looking – after knowing how much you can spend on the mortgage, look for a house to buy. Remember that property costs are higher in the better locations. When we say better locations, we mean everything is easily accessible from its location, like shopping facilities, schools, hospitals, and other domestic services. If an estate agent is near these establishments, then expect for the houses to have a higher price even if they do not really look that great. If you are tight on budget, choose a less accessible house because it will cost much less.
3. Negotiate – if you see a house you really like, it is now time for the negotiations to start. Call the estate agent handling the property and make your offer. Remember to leave room to maneuver when making this offer. Also remember that the longer a property remains unsold, the cheaper it may become. Do not worry when your first offer is turned down because it is too low, you can still increase it.
4. Apply for a mortgage – once you have chosen your house, negotiated, and the agreement has been made; you normally now apply for a mortgage from a lender, which is usually a bank (e.g. Halifax, Nationwide, etc.) However, as a first time buyer it is wise to make sure that a home loan is available before you enter into any agreements. Remember that the longer plan you choose, the less monthly premiums you will have to pay; however, it will have a higher total cost overall. Also, mortgage rates will affect your payment amounts. As you are applying for mortgages for first time buyers, you should try to learn everything about the subject first. Ask questions when with the mortgage lenders and ask what your options are (e.g. 100, 95, 90 percent mortgages, etc.), so you will know what you are getting yourself into.
5. Protect your property – once the property is yours, you should protect it from anything that might go wrong. You should get your house insured to protect it and your family. Getting your home insured will give you financial peace of mind.
6. Prepare for legal work – first time buyer mortgages do not stop after you bought your house; in fact, it is only the start of your monthly premiums. Legal work should also be done regarding your purchase of the property. The mortgage lender also needs to be furnished with copies of these legal documents. For all the legal work needed, you will need a solicitor who specializes in conveyancing.
Once these steps are done, all that is left is moving into your new house. Mortgages for first time buyers can be very tricky because of the different things that need to be learned. However, with the right help, they should not be very difficult to understand.