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.

Price Crash

There has been a lot of speculation over the past few years about house prices and whether or not it is a good time to buy/sell/rent.  This uncertainly has largely been caused by the sudden drop in prices in 2007, at a time where people had been buying with abandon.  Many agree that it is unlikely that we will see prices rise to the same extent that they had done by 2007, but the ‘price crash’ caused by the financial crisis, was not quite as bad as the media would have had us believe. 

Prices may have dropped somewhat suddenly, but they did not reach the low prices that were being paid before the sharp peak.  The average house price according to the Halifax report in September 2011 is £161,132 – this is down 29.9% from July 2007, and once again level with the prices that we saw nine years ago in September 2002.

Click to enlarge the image                                    taken from www.mountaininvestor.com/blog/?p=1020

We have once again seen a slight decrease over the past year, but prices still remain well above those of 2009, could this encourage more people to put their properties on the market?

 To Buy or Not To Buy (rent), which is cheaper?

It is no secret that it is more difficult to get a mortgage agreed than it was in 2007, but as long as you are able to raise the money for a deposit, then banks are still lending.  With rental prices increasing, many are finding that mortgage payments would in fact be more affordable, and with interest rates at 0.5% it is certainly a tempting option, but is it a realistic one if deposits cannot be raised?  With the debt levels currently being experienced in the UK, how many people can actually raise the massive 20% deposit often required for a mortgage? 

Many first time buyers are finding themselves stuck paying high rent prices without the option to get onto the property market for this very reason as the majority of their wages go out for rent each month, is there anything left over to save for a house?

 Crisis Point

For those that can afford the deposit, it must be tempting to consider whether it is cheaper to move into their new purchased home, or to rent it out, with the potential monthly income of around £718 (the average cost of renting now-a-days).  Many experts are saying that renting is ‘the new normal’ with many starting to believe there is no other option, but are the media influencing this with shocking headlines about the ‘property crisis’, and the country being at ‘crisis point’?

 Action Needed by the Government

Everyone will have their own opinions on this matter, but a general consensus seems to be that action is needed by the Government to make secured borrowing easier in a climate where pay day loans seem to dominate, and to help those trying to get their feet on the property ladder.  As a renter myself, I am personally happy to continue to do so for the time being, but knowing how much money I would need for a deposit eventually does make me worry about whether I should start saving up already. 

Winning the lottery would be an ideal solution, but as someone who doesn’t play, my chances of winning are slightly reduced, so a more practical solution is required.  How early do people need to start thinking about saving for a mortgage? And on the same note, when do we start educating individuals about the financial requirements and challenges that they will face after leaving full time education – be it school, college, or university?

• 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.

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.”

When you are renovating your home in order to add value to your property you need to make sure that you see a return on your investment.

Here are our top tips!

Renovations such as decorating do not add any significant value to your property.
Creating additional inside space such as bigger bedrooms, kitchen, lounge or even adding additional rooms can add considerable value to your home.
Conservatories are a commonly quick, easy and relatively cheap way in which to increase the value of your home. Remember you need to seek the relevant planning permission.
Installing double glazed windows and doors probably won’t add much value to your home; however they can reduce energy bills and improve security which could make your property easier to sell.
Modern and stylish kitchens and bathrooms are very appealing and can add value to your property.
If in doubt, look at similar houses for sale in your area and see what sells.
Remember to always seek relevant advice and assistance from qualified experts where necessary.

Due to the current economic climate, loans aren’t being offered at the same rate they used to be. This means that people who are looking to consolidate their existing loans and credit cards don’t have the same options available to them they did a few years ago.

Depending on your circumstances, including the amount of equity you have in your property, credit history and debt level, releasing the equity from you home by remortgaging could be a simple and easy way of repaying your debts.

Here are our top tips of what to look out for.

• Work out your income, expenditure and minimum repayments and see how long it will take you to pay off your loans at the current rate. Is it months or years?
• Calculate the interest that is being added onto your accounts. If this is high then it will take you a lot longer than you think to repay that loan. If you aren’t paying any interest or charges onto the debt then it will be better for you to keep up with the repayments.

APR
APR stands for “annual percentage rate” in relation to a mortgage or other loan.

Arrangement fee
Some mortgages and financial products come with an arrangement fee which can range from a few pounds to over £1,000.

Capital and interest mortgage
This refers to a standard repayment mortgage where each monthly payment is paying off the capital of the amount you borrowed along with the interest.

Equity
Equity is the difference between the current house value and the outstanding amount of mortgage balance.

Fixed rate mortgage
The interest rate for your mortgage is fixed for a certain period of time and will not vary during that period, regardless of what happens to the Bank of England base rate or the lender’s standard variable rate.

Flexible mortgage
This type of mortgage gives you greater control of your mortgage, including extra benefits such as making overpayments, underpayments or taking payment holidays.

Interest only mortgage
During the term of your mortgage you only pay the interest each month and the capital balance remains unpaid, meaning that at the end of the mortgage term you will still owe the amount you originally borrowed.

Standard Variable Rate
A standard variable rate (SVR) varies from lender to lender, and although the SVR can change at the lender’s discretion, the level of the SVR is often influenced by changes in the Bank of England’s base rate.

Tracker Mortgage
The interest rate on a tracker mortgage usually tracks the Bank of England base rate either by a set percentage above or below for a set period of time.

For more click here

When renovating your home it is important to make sure you don’t fall into the common pitfalls with our handy do’s and don’ts guide.

Do:

*Shop around if using a builder or tradesman and make sure that you get a few quotations before you make your decision.

*Use people that have been recommended to you, we’ve all seen the television programme Cowboy Builders!

*Make a plan of what you want to do and how much it is going to cost and stick to it.

Don’t:

*Be tempted to cut corners, if you are going to do it, do it properly.

*Get carried away, use your original plan and make sure you stick to it.

*Try and do the work yourself if it is out of your comfort zone. It can incur more costs if someone has to come and fix the problems.

If you have equity in your property then it may be possible to release some of this and help relieve any financial strain that you may have from other debts or allow you to carry out some home improvements.

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.