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Buying your first house, what do you remember?
Buying your first house can bring with it a rollercoaster of emotions. We want to know what you remember from when your brought your first home and got your first mortgage?
My memories are still fairly fresh as I purchased my first home last year. Before joining the property ladder I can honestly say I didn’t have a clue how things worked. I found the house, but then hit a stumbling block and didn’t know where to go next. The house was a brand new property so the builders assigned us to a solicitor and a mortgage advisor. From there we began the task of applying for the mortgage.
The mortgage application itself was easy enough, the waiting however was the worst part of the whole process. At the time there were lots of news stories about mortgage lenders not giving mortgages unless you had a perfect credit score, which worried me. I had to wait two weeks to find out and it was the longest two weeks of my life!
As soon as I got my approval everything steam rolled forward. From start to finish the process lasted six weeks and most of the time I found I was trying to catch my breath as things moved so quickly. My one recommendation is to make sure you have a mortgage advisor that is available to answer your questions as you will have a lot and things will run a lot smoother if you have someone that can cater to your needs.
First Time Buyer – Jargon Buster
Are you a first time buyer? Is your head spinning with all the mortgage jargon that is being thrown at you? Here are a few jargon busting explanations to help you.
- Arrangement fee
Some mortgages and financial products come with an arrangement fee which can range from a few pounds to over £1,000. You need to weigh up your options carefully; some mortgages with low arrangement fees may have a relatively high interest rate, for example. - Completion
Completion is the last stage in the mortgage process when the property is legally transferred to you. For remortgages this is the day the mortgage transfers from one lender to another. - Conveyancer
This is a professional legal expert, usually a solicitor, who handles the contractual arrangement between you and your mortgage lender. They will be responsible for registering your property with the land registry and ensuring that your mortgage deed is correctly executed. - Detailed building survey (full structural)
The most detailed kind of survey that you can request when buying a home, a surveyor will assess the building thoroughly from foundations to roof. A detailed building survey will include an appraisal of the construction of the property and a technical analysis of any significant defects, along with a suggestion of work that would need to be done to fix the defects. - Loan to value (LTV)
Loan to Value is the mortgage loan as a percentage of the value of the property or purchase price. For example a particular buy to let mortgage could be expressed as a ‘75% LTV buy to let mortgage’ which means that you would be able to borrow no more than 75% of the property’s value so you’d have to find a deposit of at least 25% to apply for a buy to let mortgage in this case. - Mortgage Deed
This is a legal document that gives the lender a legal interest in the property covered by the mortgage. Signed by both homeowner and lender, the mortgage deed confirms that the homeowner has used the property as collateral for the mortgage loan. - Term (of a loan or mortgage)
This refers to the number of years that you agree repay your mortgage over.
Helping your children onto the property ladder
It was recently announced that the 100% mortgage was coming back… on one condition, that parents or guardians of the mortgage holders agree to be guarantors for the loan. Without the 100% mortgage the typical first time buyer has to have a deposit of 20%.
The average house in the UK is currently £166,256 meaning the deposit needed would be £33,251.20 a sum that many struggle to save for.
Parents are choosing to help their children onto the property ladder by assisting them with the deposit. Some parents are therefore remortgaging their own property in order to do this.
Many parents understand that their children will possibly never get onto the property ladder without their help and see their own involvement as the only way.
Lesley recently remortgaged in order to help her daughter onto the property ladder.
“I didn’t buy my first house until I was 34 years old. I didn’t want my daughter to have to go through what I did, I was in a position where I could release some equity with a remortgage and felt that this was the best thing for me to do to help her.”
First Time Buyer – What to look out for
If you are a first time buyer the chances are your head is spinning at the moment. In my last blog I shared my experience of buying my first home, so I completely understand what you are going through.
Speaking from experience we at Remortgage Supermarket wanted to share our top tips if you are a first time buyer.
- Work out how much your budget is and look for a house that you can realistically afford.
- Look around lots of houses and make sure you are getting the most for your money.
- Make sure you are comfortable with your mortgage advisor and that they are easily contactable as you will have lots of questions.
- Work out all of the costs involved – legal fees, property valuation packs and mortgage product fees. Most mortgage lenders allow you to add the product fees onto your mortgage amount meaning this may not be a cost that you have to pay upfront. Although, remember that any fees added to your mortgage amount will have interest charged on them once the mortgage starts.
- You need to look into your future monthly payments – buildings and contents insurance, life insurance, council tax, gas, electricity and water.