First-time buyers – buying a property for the first time
Guidance and tips for first-time buyers
Buying your first property can be an exciting time but also a journey into the unknown. One of the first challenges is working out what mortgage is best for you.
One of the other things you first have to decide is how much you should borrow or, more accurately, how much you can afford to borrow. You need to be realistic about this or else it could lead to major problems later on. It used to be traditional to think ‘three times your salary’ in regards to the amount you should borrow but with property prices generally rising much faster than wages, that generalisation may well be out of date. Ultimately, it will be the lenders who will decide what you can afford. In addition, affordability checks such as details of your income and your credit score will decide how favourable a mortgage you get, if at all.
The good news is that lenders, including banks, offer a number of incentives to first-time buyers that aren’t available to other purchasers. You many be better bargaining position than some other buyers and could negotiate for things like lower fees or cashback that can make your legal costs elsewhere a bit easier to pay
Another decision to be made is what type of mortgage is best suited to you – variable rate, fixed rate or something else entirely? With a fixed-rate mortgage you know how much you have to pay each month and this could be for a relatively long time period. With a variable rate mortgage, the interest rate is linked to the Bank of England base rate. This means the rate of interest you pay could rise as well as fall.
There are also some mortgage lenders who mix fixed-rate and variable-rate mortgages to create their own particular mortgage type. Regardless of what mortgage you finally opt for, don’t sign up for anything you’re not entirely clear about, especially in regards to how much you’ll be paying each month as well as how the mortgage is structured. It may well be worth seeking out expert advice from an independent financial advisor or mortgage broker before making such a financial commitment.
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