First Time Buyer

Buying a first home can be both exciting and scary at the same time. As the borrower will have no experience of a mortgage, a lot of individuals will find that being a first time mortgage buyer can be very daunting. Obtaining a mortgage loan can be very expensive, and a lot of individuals will feel under a lot of pressure for choosing the right one. However, the majority of individuals will not even know where to start when it comes to obtaining their first time buyer mortgage. Some can even end up paying too much money than what they would need to.

A first time buyer would find it extremely useful to obtain some financial advice prior to getting their mortgage loan. A qualified professional could ensure that the borrower is fully aware of each aspect of their mortgage, aswell as making sure that the paperwork which is involved in having a first time buyer mortgage loan is handled suffiently.

When someone obtains any type of mortgage there would be costs that are associated with their mortgage loan which the borrower should consider. These costs can vary, depending on the mortgage lender with whom the borrower obtains their first time buyer mortgage with.

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These potential costs which could be linked with a first time buyer mortgage loan could be things such as:

A deposit - not all mortgage lenders will offer 100% mortgage loans. Some will require a deposit amount of anything around 15-25% of the mortgage loan amount.

An arrangement fee – a lot of mortgage lenders will actually charge the borrower an arrangement fee for initially setting up their mortgage.

A Valuation – In order for a mortgage lender to offer a mortgage they will need to first value the property for which the borrower is intending on purchasing. This is so they can guarantee that the property is worth this loan amount so that if anything went wrong with the borrowers payments, they would be able to sell the property and receive their full loan amount back. These valuations will have a small charge of around a few hundred pounds. Although there are two types of valuations available which are a basic one, which is the cheapest one or a full inspection one which will obviously cost a bit more.

The use of a Solicitor – In order to be able to obtain a mortgage, the borrower will need the use of a solicitor. This solicitor will confer with all parties of the mortgage and buying process including the other borrowers solicitors who the individual is purchasing the property from. Solicitors fees will vary considerably so it is best to browse around the market to find the cheapest. A few people will actually use a conveyancer instead of a solicitor as they will do all the things required but are actually a lot cheaper to use.

Stamp Duty – Every property that is valued higher than £120, 000 will need to have stamp duty paid against it. The normal amount is around 2% although if the property value is higher than about £600, 000 then it will be at a higher percentage.

Buildings Insurance – All mortgage lenders will require the borrow to purchase some form of buildings and contents insurance against the property. This is in case an event arises where damage is made to the property and it needs to be repaired in order to keep its value.

Life Insurance or Mortgage Insurance – This form of insurance is again required by mortgage companies in the event where the borrower falls seriously ill or death occurs. This form of protection will ensure that the loan is paid off so that the borrowers family does not have to find the finances to repay it.

Mortgage Payment Protection Insurance – This insurance is to protect the mortgage payments in case anything happens to the borrower such as unemployment etc…

If a borrower is unable to pay for these costs, some lenders will actually help the borrower by offering a 100% mortgage, which they can obtain without having to provide a deposit against their property. Aswell as this, some lenders will let the borrower add all of the costs associated with the loan, to the actual loan amount itself.