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First Time Buyer

First Time Buyers Mortgages FAQs Answered by Oportfolio Getting on the property ladder can feel like an impossible task. Although still a challenge for many, there is a lot of help available for first time buyers to get a mortgage and their first home. Here we cover some of the most frequently asked questions regarding first time buyer mortgages. You can find out more about services to help first time buyers here, or call 0207 3715 063 for an informal, no-obligation chat with one of our friendly advisers. How much do you need to earn to get a first time buyer mortgage? The amount you need to be earning in order to secure a first time buyer mortgage will depend on the cost of the property you want to buy.Depending on the products being offered by your preferred lender or lenders, you will need to have saved between at least 5% and 20% of the value of the home you want to buy.The more money you want to borrow, the higher your repayments will be and, consequently, the higher your income needs to be. How can I get a first time buyer mortgage with low income? When considering whether to lend to you, mortgage lenders will look at – among other things – your monthly income and how affordable your monthly mortgage payments will be in the context of your other ongoing financial commitments, including your living expenses such as food, utilities and daily travel costs. They will also check your credit rating with one or more credit agencies.However, if you are likely to struggle to secure a mortgage on your own due to low income there many be other options available to you such as the Government’s Help to Buy scheme, shared ownership or Right to Buy scheme.It is always worth talking to a professional mortgage adviser to understand your options. What are mortgage rates for first time buyers? Many lenders offer products for which only first time buyers are eligible. There are a number of different products which might be available to you and these will often depend on what ‘type’ of first time buyer you are.For example, you may be buying a property and securing the loan yourself, or you may require a guarantor – often a parent – to guarantee the repayments for you.Different mortgage products may also have a higher rate of interest than others. Remember, too, that opting for a longer fixed term that guarantees your repayments will not change is usually more expensive.It is a good idea to get advice from a professional mortgage broker to understand the implications of each product. What is the average deposit needed for a first time buyer in the UK?  The average deposit required by a first time buyer in the UK as of December 2020 is 15%. So if you want to buy a house for £250,000 you would need to have saved £37,500 to put down as a deposit. However, some lenders require less (as little as 5%) and others require more (up to 20%).While 100% mortgages (where the mortgage company lends you the full purchase cost) were reasonably easy to find prior to the global pandemic of 2020, they have now been mostly withdrawn by the majority of High Street ‘big name’ lenders. Where can I find more information about first time buyer mortgages? Although there are plenty of price comparison websites available to you to check rates and repayments, it’s always worth talking to a professional adviser to get a proper picture of the market and what all your options will mean for you in real world terms.There are other resources available to you, as well, though, including the Money Advice Service which offers free and impartial advice on a range of subjects relating to personal finance.Lenders also provide information about the products that are available to first time buyers but bear in mind this is not impartial. Where can I get advice on first time buyer mortgage? To really get a sense of the full range of options that are available to you, it is always best to speak to a professional mortgage adviser who will give you information and guidance that is tailored to your own specific financial situation.A professional adviser will also have access to a range of products from different lenders, ensuring you get a wide choice of mortgages to choose from. What do most first time buyers get wrong about their mortgage? There are a few mistakes that first time buyers commonly make when they start the process of trying to get a mortgage approved.The most common mistake is not having any credit history. Other mistakes include having bank statements or utility bills registered to incorrect addresses and not saving enough money to put down a deposit (you will normally need between 5% and 20% of the property purchase price, depending on the lender). What are the biggest first time home buyer mistakes and how can you avoid them? Not having any credit history is one of the most common mistakes first time buyers make. Your credit history is one of the key things a mortgage lender will check to be confident you will meet your mortgage repayment commitment.You can avoid this by taking out a credit card and ensuring you pay the balance each month or joining subscription services like Netflix to create a history of monthly payments.First time buyers often also have bank statements or utility bills that are not registered to the correct address (for example, a bank account still registered to the parents’ address or utility bills from university days) and this can derail or seriously delay a mortgage decision. How do mortgages work in the UK for first-time buyers? In practical terms, all mortgages work in the same way, regardless of the borrower’s status – a lender advances you a proportion of the purchase price (usually between 80% and 95%) and you make monthly payments over a period of years until the loan is repaid.Some first time buyer mortgages have other elements in place to guarantee the loan or help with funding – guarantor mortgages where a parent or other individual guarantees the repayments or the Government’s Help to Buy scheme are two examples – but ultimately, all mortgages require you to meet a monthly payment commitment until the loan is discharged. Do first-time home buyers need a deposit? Yes, you will almost certainly need to find a deposit of between 5% and 20% to have any chance of being accepted for a mortgage with a reputable mortgage provider. Typically, you should budget on finding at least 15% of the purchase price as a deposit, since 90% and 95% mortgages are increasingly hard to find. What is needed for a first time home buyer to qualify for a great mortgage rate? To have the best chance of getting a great mortgage rate you will need to have a good credit history, sufficient income to make your mortgage payments affordable in relation to your existing financial commitments, and a deposit – the larger the better.Affordability is always going to be a mortgage provider’s key concern, so that should be the number one priority. After that, make sure you have no unnecessary debt and where you do have debt, show you are taking a responsible approach to dealing with it (for example, consider paying more than the monthly minimum). What is the best advice you would give to first time homebuyers? Optimise your affordability ratio by trying to pay down or pay off any debt. This will have a positive effect on your credit rating and will also give your lender confidence that you take a responsible approach to your financial commitments.You should also start saving for a deposit early. Your mortgage provider will require a minimum of 5% of the purchase price as your deposit – and in reality, many lenders ask for 15% or 20%. The higher your deposit, the lower the loan to value (LTV) you’ll need from your lender – and this will also improve affordability. What mortgages can a first time buyer get? There are a number of mortgage products on the market for first time buyers. These include standard and fixed rate mortgages that would be available to all buyers (and many lenders also offer fixed products that for which only first time buyers are eligible), guarantor mortgages where someone – usually a parent or other family member – guarantees to make the mortgage repayments on your behalf if you aren’t able to, as well as Right to Buy and Help to Buy schemes that provide additional financial support and/or incentives to first time buyers. How does getting a mortgage work if you're a first-time buyer? In practical terms, a first time buyer mortgage works like any other mortgage product – a lender advances a percentage of the cost of buying your property (usually between 80% and 95%, unless you have a very large deposit) and the borrower pays back the loan and the interest it attracts over a period of years.Sometimes, first time buyers require a little extra help and support, so some lenders offer guarantor mortgages, where another person- usually a parent or family member – underwrites the monthly repayments in the event that the borrower is unable to meet the commitment.There are also other schemes – such as shared ownership and Government-backed Right to Buy and Help to Buy – that support first time buyers in getting on the housing ladder. What deposit is needed for a first-time buyer mortgage? Typically, lenders will expect you to put up a minimum of anything between 5% and 20% of the purchase price as a deposit. In reality, although it is still possible to find lenders who will accept a 5% or 10% deposit and lend you the balance, most of the main banks and building societies require you to put down 15% or 20% before they will approve your application. How to find your first-time buyer mortgage? Obviously, one way to find a first time buyer mortgage is to search on price comparison websites or speak to your own bank, another High Street bank or a building society.The problem with this approach is that unless you know the mortgage market well, it’s not always to make sense of the differences between products listed on price comparison sites, and banks and buildings societies will only offer you information about their own products.It’s always a good idea to speak to a professional mortgage adviser who will have an overview of the market as a whole and will be able to recommend products that suit your specific financial needs. How long should I fix my mortgage for if I'm a first time buyer? It’s always tricky to know how long you should fix your mortgage for. Typically, the 1-, 2-, 5- and 10-year fixed mortgages are reasonably common.A professional adviser will be able to guide you on the best approach based on your specific financial situation. #More generally, though, one good rule of thumb is to look at the economic climate. If the base interest rate set by the Bank of England is rising or likely to rise, it may be better to pay a slightly higher monthly amount to give you certainty over your outgoings for longer.If the base rate is falling or likely to fall, then you may want to have the flexibility of a shorter deal that will allow you to change lenders sooner and take advantage of a better deal. How to find your first mortgage? We would always recommend you speak to a professional adviser  when you are making any significant financial decision.The benefit of this is that a qualified adviser has access to a wealth of product information and will be able to give you advice and guidance that reflects your existing circumstances whilst also taking into account your future plans.You can choose a mortgage based on what’s available on price comparison websites or the mortgage products your bank is offering – but these won’t always be the most suitable deals for you personally. What type of first time buyer mortgage should I choose? The type of first time buyer mortgage you choose will depend on your circumstances. If you have a decent deposit of between 5% and 20%, a good credit score and a healthy income, you will have a wider choice of products available to you.However, many first time buyers struggle to get onto the housing ladder because they either have few if any savings or they don’t earn enough in salary to meet lenders’ affordability checks.That doesn’t necessarily mean you can’t secure a mortgage – but it does mean you may have to consider products like a guarantor mortgage, which would mean someone else – normally a family member – underwriting your monthly repayments if you were unable to afford them.It’s always worth talking to a professional mortgage adviser to understand the options that are available to you. Can I afford a mortgage? Whether you can afford a mortgage depends on how much you are borrowing – and it’s worth bearing in mind that affordability is about balancing your mortgage repayments with your ongoing commitments and your income.As a first step, use an online mortgage calculator to work out if you’re likely to be able to afford the mortgage you want – and then talk to a professional adviser to get a more detailed picture of what’s possible. What are first time buyer mortgage affordability checks? First time buyer mortgage affordability checks are designed to see if you can afford the repayments for the amount you want to borrow in order to buy your home.Your lender will look at your income and ask you to provide details of all of your outgoings, including credit card payments and living expenses, to work out whether you’re able to meet the mortgage commitment on an ongoing basis – or whether you’re stretching yourself too thin. What first time buyer mortgage fees will I have to pay? Mortgage arrangement fees vary from lender to lender. These are often added to your loan and paid off through your monthly repayment. Some lenders also apply other fees – for example, legal costs – so it’s always worth checking the fee tariff carefully before deciding which lender to choose.A professional mortgage adviser can help you to make sense of the various products and fees – but remember they will also charge a fee for their services. The benefit of using a professional adviser is that they will manage your application from start to finish and will ensure it has the best possible chance of success. Do I need a big deposit for a first time mortgage? The more money you can put down as a deposit, the lower your mortgage repayments will be (or the sooner you can pay off your loan).You don’t have to have a big deposit – most lenders require 15% to 20% of the purchase price (though you can find some lenders who will accept 5% or 10%) – but the more you can offer up front, the better off you will be financially in the long term. Will lenders give a first time buyer mortgage on any property? There is no restriction on the type of residential property you can purchase as a first time buyer.Just remember that the bigger the property, higher the purchase price is ,likely to be and the more cash you will need to save for a deposit.Commercial and buy to let properties are a different matter and you should seek advice from a professional mortgage advisor if you are planning to buiy a home you don’t intend to live in yourself. How to find the best mortgages for first time buyers? We would always recommend talking to a professional mortgage adviser to find the right mortgage product. As a specialist, a professional mortgage adviser or broker will be able to talk you through current policies, rules and tax issues and will also have access to a wider choice of mortgage products.If you plan to find a mortgage by yourself, be aware that banks and building societies do not offer impartial advice and products you find on price comparison websites need to be fully researched so you understand the advantages and disadvantages and are aware of any hidden fees or special conditions. How does a mortgage rate work? Mortgage rates are influenced by the Bank of England base rate but are not the same as the Bank of England base rate. Most lenders offer a variety of rates – all above the base rate – that relate to different products.Very generally, speaking there are broadly three types of interest rate that you can choose from: fixed rates, which stay the same for a fixed period of time (usually between one and 10 years), tracker rates which are usually above the base rate but track changes in the base rate (so if the base rate goes up or down by 0.25%, for example, your mortgage rate will change by the same amount and the lender’s standard variable rate (SVR) which is almost always the highest of the three. What happens after my first time buyer mortgage offer is issued? Once you have received your formal mortgage offer, it is usually valid for a certain period of time (often between three and six months) by which time you need to have completed your purchase.Some lenders may also require you to have a survey carried out on the property you are buying, as a condition of the offer, in order to confirm it is structurally sound. How are first-time buyer mortgages different? Broadly speaking, first time buyer mortgages aren’t fundamentally different in terms of how they work – a mortgage provider lends you an agreed sum of money which you then repay over a period of years. During this time, the mortgage lender has a charge on your house, which simply means they have the power to repossess it if you fail to keep up your mortgage payments.First time mortgages usually differ either by type (some first time buyers buy their property using guarantor mortgages, where someone else guarantees the monthly repayments, or under a shared ownership agreement) or in the preferential rates that are sometimes offered by lenders to encourage new buyers onto the housing ladder. Should I add the cost of product fees to my first time buyer mortgage? If you have the money available to pay the fees without including them in the mortgage, that is a cheaper way to deal with them as you won’t pay interest on that additional element of the loan.Many first time buyers work to tight budgets and so for some people it is more cost effective in the short term to include the lender fees as part of the overall loan. How to prepare for your first time buyer mortgage application? Before you begin a mortgage application, you can prepare by getting your financial house in order.Ensure you’re able to offer the minimum deposit required by the lender you plan to choose (usually between 5% and 20% of the purchase price). Pay down or pay off existing debt. If you’re likely to be carrying debt at the time you submit your application, try to pay more than the minimum amount required by your creditors each month Take steps to improve your credit history – and if you don’t have any credit history, try to create one by joining subscription services or taking out a credit card (but remember to pay off the balance each month!) Ensure all your bank statements and utility bills are registered to your current addressHow does a fixed rate first time buyer mortgage work? A fixed mortgage rate for first time buyers works by guaranteeing your monthly payments will be the same each month for the period during which the loan is fixed, regardless of whether the Bank of England base rate goes up or down.You can win and lose with a fixed rate mortgage – winning when the base rate goes up, losing when it falls below your fixed rate. But it has the advantage of giving you the peace of mind of knowing exactly how much your mortgage will cost for a certain number of years. What happens at the end of my first time buyer mortgage deal? Like all mortgage deals, your first time buyer mortgage deal will come to an end after a certain period of time.If you do nothing, your loan will move to the lender’s standard variable rate (SVR). This is usually the most expensive way to borrow money from that lender.You do have a number of options – and you should act before your current deal ends. Either negotiate with your lender to move you to a new fixed rate (they should do this without you having to go through a new application), remortgage with another lender (this will require a full application) or stay on the SVR (this is highly unlikely to be the best option). How to improve your chances of getting a first time buyer mortgage? You can improve your chances of getting your first time buyer mortgage by making sure there are no nasty surprises in your financial and credit history.Your lender will research your finances thoroughly as part of what is known as an affordability test. They will want to see that you have a responsible attitude to any existing debt, that your existing debt is not excessive, that there is plenty of daylight between your income and your existing financial commitments and that your credit history is sound.You can improve that picture by taking simple steps to reduce or pay off you debt, overpay on monthly minimums and ensure you pay off balances where you can. How much can I borrow as a first time home buyer? How much you can borrow as a first time buyer depends on how much deposit you have to put down, the purchase price of your property and your income.A mortgage calculator can help you to see what might be possible – but it’s only a rule of thumb as it won’t factor in any of the variables that make up the affordability test your lender will carry out.You can find the Oportfolio mortgage calculator on this page. How to improve your chances to get a first time buyer mortgage? You can improve your chances of having an application for a first time buyer mortgage approved by taking steps to reduce or pay off existing commitments and debt and by making sure there are no black flags in your credit history.Most simple credit history checks are free (but you would have to pay for the detailed information on your credit file). Most lenders will check your history with one of the big credit agencies like Equifax or Experian.You can also help your case by making sure you’ve got a decent deposit to put down on your purchase – most lenders will expect you to put down between 5% and 20% of the purchase price, but typically it will be between 15% and 20%. What are the different types of first time buyer mortgages? First time buyers have a number of options when it comes to choosing a mortgage product. Like all buyers, first time buyers can choose standard and fixed rate mortgages, but you may also find special products that are designed specifically for first time buyers.These include guarantor mortgages where another person will guarantee to make your monthly payment s for you if you can’t afford to. This is usually a parent or other family member.There are also special government-backed schemes like Right to Buy and Help to Buy that provide additional financial support and/or incentives to first time buyers. What is the difference between a fixed rate and a variable rate mortgage? A fixed rate mortgage is a mortgage where the interest you pay on your loan – and therefore the repayments you make each month – are fixed for a certain period of time (usually between one and 10 years), regardless of whether the base rate goes up or down.Fixed interest mortgages give budgeting certainty for the period of the deal.Standard variable rate mortgages are loans where the interest rate will fall or rise depending on what is happening to the Bank of England base rate. It rarely makes financial sense to be on a standard rate mortgage, unless you only have a few months of the loan remaining. What is a fixed rate first time buyers’ mortgage? A fixed rate first time buyer’s mortgage is a loan where the interest is set at a certain level for the lifetime of the deal. Most fixed rate periods are for between one and 10 yearsA fixed rate means your repayments will be unaffected by changes in the economy and their impact on the Bank of England base rate. What is a variable rate first time buyers’ mortgage? A standard variable rate first time buyers’ mortgage (SVR) is a loan where the interest rate applied to your mortgage moves up or down to reflect changes in the Bank of England base rate.Unless you have only a matter of months until the end of your mortgage, it rarely makes sense to be on your lender’s SVR, and it’s worth bearing in mind that although lenders are always likely to raise interest rates in line with the base rate, they rarely pass on 100% of the benefit when the base rate goes down! What is an offset mortgage? An offset mortgage ‘offsets’ the amount of mortgage interest you’re charged by linking savings to your mortgage account with a savings account that you set up with the same lender.This type of mortgage essentially looks at your savings as having ‘paid’ an equivalent proportion of your overall mortgage loan. You can still access the savings if you need to – but if you take money out, your interest payments go up, and vice versa. Is an offset mortgage suitable for first time buyers?  If you have cash sitting in an account that is earning little or no interest, then an offset mortgage may be a good solution for you, as the amount you save in mortgage interest will usually be higher than the interest that money will earn in a savings account.It is worth talking to a professional mortgage adviser to look at the pros and cons of offset mortgages to decide whether this type of mortgage is suited to you in the context of your immediate and long-term plans.How much deposit will I need as a first-time buyer?The amount you’ll need for a deposit on your first home varies from lender to lender. But typically lenders will require you to put between 5% and 20% of the property purchase price down as a deposit.In reality, whilst it’s still possible to find lenders who will accept a deposit of between 5% and 10%, most mortgage providers now ask borrowers to put up 15%-20%. How does an Agreement in Principle differ from a mortgage offer? Contrary to what many people believe, an Agreement in Principle and a mortgage offer are not the same thing.An Agreement in Principle is exactly that – an indication that, based on fundamental information you have provided to a lender about your income and expenditure, they would be prepared to lend you the amount of money you need to buy a particular property.A mortgage offer is a formal agreement that the lender will definitely provide the money for you to make the purchase. A mortgage offer is based on much more detailed affordability checks, provision of documentary evidence of income and credit agency checks. Which schemes are available to help first-time buyers? There are three schemes available to support first time buyers. The Right to Buy scheme allows eligible council and housing association tenants to buy their properties at a discounted price (as of December 1st 2020 the discount is £112,300 in London and £84,200 outside London).The Help to Buy scheme, backed by the Government, offers financial assistance to buy their first property, as long as its value is under £600,000.And the Shared Ownership scheme allows people to part buy and part rent their home from the property owner. The properties are usually newly-built and owned by housing associations. What is a loan to value ratio (LTV)? The loan to value ratio, or LTV, is the percentage of a property purchase price that your mortgage provider will lend you. Typically, most lenders require borrowers to put up 15% to 20% of the purchase price as a deposit, giving an LTV ratio of 80%-85%. What insurance will I need? You will certainly need to have buildings and contents insurance when you buy your first – or any other – home. This is to ensure that if your property is damaged for any reason, the cost of repairs are covered by your policy, protecting not only your financial interest in the property but also your mortgage lender’s.Be sure to read the small print to understand what exclusions apply for any policy you may be considering as certain events will not be covered under a standard policy, and remember that buy to let properties require specialist landlord insurance. When getting a first time buyer mortgage do I need life cover? Not all lenders will insist you take out life cover to protect your mortgage – although some do – but it’s certainly advisable to do so.Having life cover ensures that in the event of your death or a terminal diagnosis you and/or your family will receive a tax-free lump sum pay out that will cover the remaining loan.It is recommended that you speak to a professional adviser to discuss your specific needs before taking out any sort of life or personal finance insurance. When getting a first time buyer mortgage do I need critical illness cover? Critical illness cover – or cancer cover as it is sometimes known, will pay out a lump sum upon diagnosis of a critical illness like cancer. This tax-free sum can be used for any purpose and will ensure that if you choose to you are able to either pay off your mortgage or meet your mortgage repayments even if you are unable to work. Does shopping around for mortgage rates hurt your credit score? Shopping around for mortgage rates does not impact on your credit score at all.However, if you make a formal application for a mortgage and are rejected, this will be registered on your credit file and may affect your credit score, potentially making it harder to obtain credit in the future.You can check your credit score without affecting it by using one of the many credit reference agencies operating in the UK. Equifax and Experian are the two largest and are the primary sources of credit references used by most credit brokers. Can I negotiate a first time buyer mortgage rate? Whilst you can negotiate as much as you like on the purchase price of a property, it is not possible to negotiate a mortgage rate directly with a reputable lender.Mortgage products tend to be fixed for the market and are available for all borrowers who meet their criteria. These products may be withdrawn by the lender and replaced by new products with different incentives or interest rates.It is worth speaking to a professional adviser to get advice about your options when you’re looking for a first time buyer mortgage.Read more about our services to help for first time buyers here, or call 0207 3715 063 for an informal, no-obligation chat with one of our friendly advisers.{ "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{ "@type": "Question", "name": "How much do you need to earn to get a first time buyer mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "The amount you need to be earning in order to secure a first time buyer mortgage will depend on the cost of the property you want to buy.Depending on the products being offered by your preferred lender or lenders, you will need to have saved between at least 5% and 20% of the value of the home you want to buy.The more money you want to borrow, the higher your repayments will be and, consequently, the higher your income needs to be." } },{ "@type": "Question", "name": "How can I get a first time buyer mortgage with low income?", "acceptedAnswer": { "@type": "Answer", "text": "When considering whether to lend to you, mortgage lenders will look at – among other things – your monthly income and how affordable your monthly mortgage payments will be in the context of your other ongoing financial commitments, including your living expenses such as food, utilities and daily travel costs. 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However, some lenders require less (as little as 5%) and others require more (up to 20%).While 100% mortgages (where the mortgage company lends you the full purchase cost) were reasonably easy to find prior to the global pandemic of 2020, they have now been mostly withdrawn by the majority of High Street ‘big name’ lenders." } },{ "@type": "Question", "name": "Where can I find more information about first time buyer mortgages?", "acceptedAnswer": { "@type": "Answer", "text": "Although there are plenty of price comparison websites available to you to check rates and repayments, it’s always worth talking to a professional adviser to get a proper picture of the market and what all your options will mean for you in real world terms.There are other resources available to you, as well, though, including the Money Advice Service which offers free and impartial advice on a range of subjects relating to personal finance.Lenders also provide information about the products that are available to first time buyers but bear in mind this is not impartial." } },{ "@type": "Question", "name": "Where can I get advice on first time buyer mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "To really get a sense of the full range of options that are available to you, it is always best to speak to a professional mortgage adviser who will give you information and guidance that is tailored to your own specific financial situation.A professional adviser will also have access to a range of products from different lenders, ensuring you get a wide choice of mortgages to choose from." } },{ "@type": "Question", "name": "What do most first time buyers get wrong about their mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "There are a few mistakes that first time buyers commonly make when they start the process of trying to get a mortgage approved.The most common mistake is not having any credit history. 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Your credit history is one of the key things a mortgage lender will check to be confident you will meet your mortgage repayment commitment.You can avoid this by taking out a credit card and ensuring you pay the balance each month or joining subscription services like Netflix to create a history of monthly payments.First time buyers often also have bank statements or utility bills that are not registered to the correct address (for example, a bank account still registered to the parents’ address or utility bills from university days) and this can derail or seriously delay a mortgage decision." } },{ "@type": "Question", "name": "How do mortgages work in the UK for first-time buyers?", "acceptedAnswer": { "@type": "Answer", "text": "In practical terms, all mortgages work in the same way, regardless of the borrower’s status – a lender advances you a proportion of the purchase price (usually between 80% and 95%) and you make monthly payments over a period of years until the loan is repaid" } },{ "@type": "Question", "name": "Do first-time home buyers need a deposit?", "acceptedAnswer": { "@type": "Answer", "text": "Yes, you will almost certainly need to find a deposit of between 5% and 20% to have any chance of being accepted for a mortgage with a reputable mortgage provider. Typically, you should budget on finding at least 15% of the purchase price as a deposit, since 90% and 95% mortgages are increasingly hard to find." } },{ "@type": "Question", "name": "What is needed for a first time home buyer to qualify for a great mortgage rate?", "acceptedAnswer": { "@type": "Answer", "text": "To have the best chance of getting a great mortgage rate you will need to have a good credit history, sufficient income to make your mortgage payments affordable in relation to your existing financial commitments, and a deposit – the larger the better.Affordability is always going to be a mortgage provider’s key concern, so that should be the number one priority. After that, make sure you have no unnecessary debt and where you do have debt, show you are taking a responsible approach to dealing with it (for example, consider paying more than the monthly minimum)." } },{ "@type": "Question", "name": "What is the best advice you would give to first time homebuyers?", "acceptedAnswer": { "@type": "Answer", "text": "Optimise your affordability ratio by trying to pay down or pay off any debt. This will have a positive effect on your credit rating and will also give your lender confidence that you take a responsible approach to your financial commitments.You should also start saving for a deposit early. Your mortgage provider will require a minimum of 5% of the purchase price as your deposit – and in reality, many lenders ask for 15% or 20%. The higher your deposit, the lower the loan to value (LTV) you’ll need from your lender – and this will also improve affordability." } },{ "@type": "Question", "name": "What mortgages can a first time buyer get?", "acceptedAnswer": { "@type": "Answer", "text": "There are a number of mortgage products on the market for first time buyers. These include standard and fixed rate mortgages that would be available to all buyers (and many lenders also offer fixed products that for which only first time buyers are eligible), guarantor mortgages where someone – usually a parent or other family member – guarantees to make the mortgage repayments on your behalf if you aren’t able to, as well as Right to Buy and Help to Buy schemes that provide additional financial support and/or incentives to first time buyers." } },{ "@type": "Question", "name": "How does getting a mortgage work if you're a first-time buyer?", "acceptedAnswer": { "@type": "Answer", "text": "In practical terms, a first time buyer mortgage works like any other mortgage product – a lender advances a percentage of the cost of buying your property (usually between 80% and 95%, unless you have a very large deposit) and the borrower pays back the loan and the interest it attracts over a period of years." } },{ "@type": "Question", "name": "What deposit is needed for a first-time buyer mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "Typically, lenders will expect you to put up a minimum of anything between 5% and 20% of the purchase price as a deposit. In reality, although it is still possible to find lenders who will accept a 5% or 10% deposit and lend you the balance, most of the main banks and building societies require you to put down 15% or 20% before they will approve your application." } },{ "@type": "Question", "name": "How to find your first-time buyer mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "Obviously, one way to find a first time buyer mortgage is to search on price comparison websites or speak to your own bank, another High Street bank or a building society.The problem with this approach is that unless you know the mortgage market well, it’s not always to make sense of the differences between products listed on price comparison sites, and banks and buildings societies will only offer you information about their own products.It’s always a good idea to speak to a professional mortgage adviser who will have an overview of the market as a whole and will be able to recommend products that suit your specific financial needs." } },{ "@type": "Question", "name": "How long should I fix my mortgage for if I'm a first time buyer?", "acceptedAnswer": { "@type": "Answer", "text": "It’s always tricky to know how long you should fix your mortgage for. Typically, the 1-, 2-, 5- and 10-year fixed mortgages are reasonably common.A professional adviser will be able to guide you on the best approach based on your specific financial situation. #More generally, though, one good rule of thumb is to look at the economic climate. If the base interest rate set by the Bank of England is rising or likely to rise, it may be better to pay a slightly higher monthly amount to give you certainty over your outgoings for longer.If the base rate is falling or likely to fall, then you may want to have the flexibility of a shorter deal that will allow you to change lenders sooner and take advantage of a better deal." } },{ "@type": "Question", "name": "How to find your first mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "We would always recommend you speak to a professional adviser  when you are making any significant financial decision.The benefit of this is that a qualified adviser has access to a wealth of product information and will be able to give you advice and guidance that reflects your existing circumstances whilst also taking into account your future plans.You can choose a mortgage based on what’s available on price comparison websites or the mortgage products your bank is offering – but these won’t always be the most suitable deals for you personally." } },{ "@type": "Question", "name": "What type of first time buyer mortgage should I choose?", "acceptedAnswer": { "@type": "Answer", "text": "The type of first time buyer mortgage you choose will depend on your circumstances. If you have a decent deposit of between 5% and 20%, a good credit score and a healthy income, you will have a wider choice of products available to you.However, many first time buyers struggle to get onto the housing ladder because they either have few if any savings or they don’t earn enough in salary to meet lenders’ affordability checks.That doesn’t necessarily mean you can’t secure a mortgage – but it does mean you may have to consider products like a guarantor mortgage, which would mean someone else – normally a family member – underwriting your monthly repayments if you were unable to afford them." } },{ "@type": "Question", "name": "Can I afford a mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "Whether you can afford a mortgage depends on how much you are borrowing – and it’s worth bearing in mind that affordability is about balancing your mortgage repayments with your ongoing commitments and your income.As a first step, use an online mortgage calculator to work out if you’re likely to be able to afford the mortgage you want – and then talk to a professional adviser to get a more detailed picture of what’s possible." } },{ "@type": "Question", "name": "What are first time buyer mortgage affordability checks?", "acceptedAnswer": { "@type": "Answer", "text": "First time buyer mortgage affordability checks are designed to see if you can afford the repayments for the amount you want to borrow in order to buy your home.Your lender will look at your income and ask you to provide details of all of your outgoings, including credit card payments and living expenses, to work out whether you’re able to meet the mortgage commitment on an ongoing basis – or whether you’re stretching yourself too thin." } },{ "@type": "Question", "name": "What first time buyer mortgage fees will I have to pay?", "acceptedAnswer": { "@type": "Answer", "text": "Mortgage arrangement fees vary from lender to lender. These are often added to your loan and paid off through your monthly repayment. Some lenders also apply other fees – for example, legal costs – so it’s always worth checking the fee tariff carefully before deciding which lender to choose.A professional mortgage adviser can help you to make sense of the various products and fees – but remember they will also charge a fee for their services. The benefit of using a professional adviser is that they will manage your application from start to finish and will ensure it has the best possible chance of success." } },{ "@type": "Question", "name": "Do I need a big deposit for a first time mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "The more money you can put down as a deposit, the lower your mortgage repayments will be (or the sooner you can pay off your loan).You don’t have to have a big deposit – most lenders require 15% to 20% of the purchase price (though you can find some lenders who will accept 5% or 10%) – but the more you can offer up front, the better off you will be financially in the long term." } },{ "@type": "Question", "name": "Will lenders give a first time buyer mortgage on any property?", "acceptedAnswer": { "@type": "Answer", "text": "There is no restriction on the type of residential property you can purchase as a first time buyer.Just remember that the bigger the property, higher the purchase price is ,likely to be and the more cash you will need to save for a deposit.Commercial and buy to let properties are a different matter and you should seek advice from a professional mortgage advisor if you are planning to buiy a home you don’t intend to live in yourself." } },{ "@type": "Question", "name": "How to find the best mortgages for first time buyers?", "acceptedAnswer": { "@type": "Answer", "text": "We would always recommend talking to a professional mortgage adviser to find the right mortgage product. As a specialist, a professional mortgage adviser or broker will be able to talk you through current policies, rules and tax issues and will also have access to a wider choice of mortgage products.If you plan to find a mortgage by yourself, be aware that banks and building societies do not offer impartial advice and products you find on price comparison websites need to be fully researched so you understand the advantages and disadvantages and are aware of any hidden fees or special conditions." } },{ "@type": "Question", "name": "How does a mortgage rate work?", "acceptedAnswer": { "@type": "Answer", "text": "Mortgage rates are influenced by the Bank of England base rate but are not the same as the Bank of England base rate. Most lenders offer a variety of rates – all above the base rate – that relate to different products.Very generally, speaking there are broadly three types of interest rate that you can choose from: fixed rates, which stay the same for a fixed period of time (usually between one and 10 years), tracker rates which are usually above the base rate but track changes in the base rate (so if the base rate goes up or down by 0.25%, for example, your mortgage rate will change by the same amount and the lender’s standard variable rate (SVR) which is almost always the highest of the three." } },{ "@type": "Question", "name": "What happens after my first time buyer mortgage offer is issued?", "acceptedAnswer": { "@type": "Answer", "text": "Once you have received your formal mortgage offer, it is usually valid for a certain period of time (often between three and six months) by which time you need to have completed your purchase.Some lenders may also require you to have a survey carried out on the property you are buying, as a condition of the offer, in order to confirm it is structurally sound." } },{ "@type": "Question", "name": "How are first-time buyer mortgages different?", "acceptedAnswer": { "@type": "Answer", "text": "Broadly speaking, first time buyer mortgages aren’t fundamentally different in terms of how they work – a mortgage provider lends you an agreed sum of money which you then repay over a period of years. During this time, the mortgage lender has a charge on your house, which simply means they have the power to repossess it if you fail to keep up your mortgage payments.First time mortgages usually differ either by type (some first time buyers buy their property using guarantor mortgages, where someone else guarantees the monthly repayments, or under a shared ownership agreement) or in the preferential rates that are sometimes offered by lenders to encourage new buyers onto the housing ladder." } },{ "@type": "Question", "name": "Should I add the cost of product fees to my first time buyer mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "If you have the money available to pay the fees without including them in the mortgage, that is a cheaper way to deal with them as you won’t pay interest on that additional element of the loan.Many first time buyers work to tight budgets and so for some people it is more cost effective in the short term to include the lender fees as part of the overall loan." } },{ "@type": "Question", "name": "How to prepare for your first time buyer mortgage application?", "acceptedAnswer": { "@type": "Answer", "text": "Before you begin a mortgage application, you can prepare by getting your financial house in order.Ensure you’re able to offer the minimum deposit required by the lender you plan to choose (usually between 5% and 20% of the purchase price).Pay down or pay off existing debt.If you’re likely to be carrying debt at the time you submit your application, try to pay more than the minimum amount required by your creditors each monthTake steps to improve your credit history – and if you don’t have any credit history, try to create one by joining subscription services or taking out a credit card (but remember to pay off the balance each month!)Ensure all your bank statements and utility bills are registered to your current address" } },{ "@type": "Question", "name": "How does a fixed rate first time buyer mortgage work?", "acceptedAnswer": { "@type": "Answer", "text": "A fixed mortgage rate for first time buyers works by guaranteeing your monthly payments will be the same each month for the period during which the loan is fixed, regardless of whether the Bank of England base rate goes up or down.You can win and lose with a fixed rate mortgage – winning when the base rate goes up, losing when it falls below your fixed rate. But it has the advantage of giving you the peace of mind of knowing exactly how much your mortgage will cost for a certain number of years." } },{ "@type": "Question", "name": "What happens at the end of my first time buyer mortgage deal?", "acceptedAnswer": { "@type": "Answer", "text": "Like all mortgage deals, your first time buyer mortgage deal will come to an end after a certain period of time.If you do nothing, your loan will move to the lender’s standard variable rate (SVR). This is usually the most expensive way to borrow money from that lender.You do have a number of options – and you should act before your current deal ends. Either negotiate with your lender to move you to a new fixed rate (they should do this without you having to go through a new application), remortgage with another lender (this will require a full application) or stay on the SVR (this is highly unlikely to be the best option)." } },{ "@type": "Question", "name": "How to improve your chances of getting a first time buyer mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "You can improve your chances of getting your first time buyer mortgage by making sure there are no nasty surprises in your financial and credit history.Your lender will research your finances thoroughly as part of what is known as an affordability test. They will want to see that you have a responsible attitude to any existing debt, that your existing debt is not excessive, that there is plenty of daylight between your income and your existing financial commitments and that your credit history is sound.You can improve that picture by taking simple steps to reduce or pay off you debt, overpay on monthly minimums and ensure you pay off balances where you can." } },{ "@type": "Question", "name": "How much can I borrow as a first time home buyer?", "acceptedAnswer": { "@type": "Answer", "text": "How much you can borrow as a first time buyer depends on how much deposit you have to put down, the purchase price of your property and your income.A mortgage calculator can help you to see what might be possible – but it’s only a rule of thumb as it won’t factor in any of the variables that make up the affordability test your lender will carry out." } },{ "@type": "Question", "name": "How to improve your chances to get a first time buyer mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "You can improve your chances of having an application for a first time buyer mortgage approved by taking steps to reduce or pay off existing commitments and debt and by making sure there are no black flags in your credit history.Most simple credit history checks are free (but you would have to pay for the detailed information on your credit file). Most lenders will check your history with one of the big credit agencies like Equifax or Experian.You can also help your case by making sure you’ve got a decent deposit to put down on your purchase – most lenders will expect you to put down between 5% and 20% of the purchase price, but typically it will be between 15% and 20%" } },{ "@type": "Question", "name": "What are the different types of first time buyer mortgages?", "acceptedAnswer": { "@type": "Answer", "text": "First time buyers have a number of options when it comes to choosing a mortgage product. Like all buyers, first time buyers can choose standard and fixed rate mortgages, but you may also find special products that are designed specifically for first time buyers.These include guarantor mortgages where another person will guarantee to make your monthly payment s for you if you can’t afford to. This is usually a parent or other family member.There are also special government-backed schemes like Right to Buy and Help to Buy that provide additional financial support and/or incentives to first time buyers." } },{ "@type": "Question", "name": "What is the difference between a fixed rate and a variable rate mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "A fixed rate mortgage is a mortgage where the interest you pay on your loan – and therefore the repayments you make each month – are fixed for a certain period of time (usually between one and 10 years), regardless of whether the base rate goes up or down.Fixed interest mortgages give budgeting certainty for the period of the deal.Standard variable rate mortgages are loans where the interest rate will fall or rise depending on what is happening to the Bank of England base rate. It rarely makes financial sense to be on a standard rate mortgage, unless you only have a few months of the loan remaining." } },{ "@type": "Question", "name": "What is a fixed rate first time buyers’ mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "A fixed rate first time buyer’s mortgage is a loan where the interest is set at a certain level for the lifetime of the deal. Most fixed rate periods are for between one and 10 yearsA fixed rate means your repayments will be unaffected by changes in the economy and their impact on the Bank of England base rate." } },{ "@type": "Question", "name": "What is a variable rate first time buyers’ mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "A standard variable rate first time buyers’ mortgage (SVR) is a loan where the interest rate applied to your mortgage moves up or down to reflect changes in the Bank of England base rate.Unless you have only a matter of months until the end of your mortgage, it rarely makes sense to be on your lender’s SVR, and it’s worth bearing in mind that although lenders are always likely to raise interest rates in line with the base rate, they rarely pass on 100% of the benefit when the base rate goes down!" } },{ "@type": "Question", "name": "What is an offset mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "An offset mortgage ‘offsets’ the amount of mortgage interest you’re charged by linking savings to your mortgage account with a savings account that you set up with the same lender.This type of mortgage essentially looks at your savings as having ‘paid’ an equivalent proportion of your overall mortgage loan. You can still access the savings if you need to – but if you take money out, your interest payments go up, and vice versa." } },{ "@type": "Question", "name": "Is an offset mortgage suitable for first time buyers?", "acceptedAnswer": { "@type": "Answer", "text": "If you have cash sitting in an account that is earning little or no interest, then an offset mortgage may be a good solution for you, as the amount you save in mortgage interest will usually be higher than the interest that money will earn in a savings account.It is worth talking to a professional mortgage adviser to look at the pros and cons of offset mortgages to decide whether this type of mortgage is suited to you in the context of your immediate and long-term plans.How much deposit will I need as a first-time buyer?The amount you’ll need for a deposit on your first home varies from lender to lender. But typically lenders will require you to put between 5% and 20% of the property purchase price down as a deposit.In reality, whilst it’s still possible to find lenders who will accept a deposit of between 5% and 10%, most mortgage providers now ask borrowers to put up 15%-20%." } },{ "@type": "Question", "name": "How does an Agreement in Principle differ from a mortgage offer?", "acceptedAnswer": { "@type": "Answer", "text": "Contrary to what many people believe, an Agreement in Principle and a mortgage offer are not the same thing.An Agreement in Principle is exactly that – an indication that, based on fundamental information you have provided to a lender about your income and expenditure, they would be prepared to lend you the amount of money you need to buy a particular property.A mortgage offer is a formal agreement that the lender will definitely provide the money for you to make the purchase. A mortgage offer is based on much more detailed affordability checks, provision of documentary evidence of income and credit agency checks." } },{ "@type": "Question", "name": "Which schemes are available to help first-time buyers?", "acceptedAnswer": { "@type": "Answer", "text": "There are three schemes available to support first time buyers. The Right to Buy scheme allows eligible council and housing association tenants to buy their properties at a discounted price (as of December 1st 2020 the discount is £112,300 in London and £84,200 outside London).The Help to Buy scheme, backed by the Government, offers financial assistance to buy their first property, as long as its value is under £600,000.And the Shared Ownership scheme allows people to part buy and part rent their home from the property owner. The properties are usually newly-built and owned by housing associations." } },{ "@type": "Question", "name": "Does shopping around for mortgage rates hurt your credit score?", "acceptedAnswer": { "@type": "Answer", "text": "Shopping around for mortgage rates does not impact on your credit score at all.However, if you make a formal application for a mortgage and are rejected, this will be registered on your credit file and may affect your credit score, potentially making it harder to obtain credit in the future.You can check your credit score without affecting it by using one of the many credit reference agencies operating in the UK. Equifax and Experian are the two largest and are the primary sources of credit references used by most credit brokers." } },{ "@type": "Question", "name": "Can I negotiate a first time buyer mortgage rate?", "acceptedAnswer": { "@type": "Answer", "text": "Whilst you can negotiate as much as you like on the purchase price of a property, it is not possible to negotiate a mortgage rate directly with a reputable lender.Mortgage products tend to be fixed for the market and are available for all borrowers who meet their criteria. These products may be withdrawn by the lender and replaced by new products with different incentives or interest rates.It is worth speaking to a professional adviser to get advice about your options when you’re looking for a first time buyer mortgage." } }] }

by  -  1 December 2020

Buy to Let

It’s been a few months since I last wrote about Brexit and its likely impact on interest rates, the mortgage sector and the residential property market. That was not long after the deadline for the UK to leave the EU was extended to the end of October.So, now that we’re roughly halfway between the last deadline and this one, what’s changed?On the one hand, nothing much has changed at all. There’s no more clarity now on how we’ll leave the bloc (or even, perhaps, if we’ll leave) than there was three months ago.But politically-speaking, on the other hand, everything has changed. We have a new Prime Minister working with an even more slender majority than his predecessor and leading a party that, if anything, is more divided than it has been at any point since the EU referendum.He chairs a cabinet that is loudly pro-Leave and, publicly at least, completely aligned to taking the UK out of Europe on October 31 come what may.Outside the inner sanctum of the cabinet, former senior ministers warn of chaos ahead if Britain is allowed to crash out of Europe without a deal, while the apparatchiks of central and local government ramp up their preparations for No Deal.Labour is said to be planning a vote of no confidence in a bid to force a General Election. The Liberal Democrats have a new leader in Jo Swinson, and her fiercely pro-Remain party is attracting membership applications from former Tory MPs, disillusioned with their brief stint as part of the Change UK party.All in all, things have certainly been better within Great Britain PLC. But what does the uncertainty mean if you’ve got a mortgage or you’re thinking of buying and/or selling your home?Naturally, it depends on what you read, who you listen to and whether you’re on the Winnie the Pooh or Eeyore side of the optimism/pessimism divide. But amid the more outlandish crystal ball-gazing, there have been some interesting and well-informed hypotheses doing the rounds recently.The general consensus seems to be that a No Deal Brexit would substantially increase the chances of an economic downturn. Some commentators have stopped short of predicting a full-on recession, but others haven’t been quite as shy.According to the Guardian’s personal finance and consumer correspondents, this may not be a bad thing for homeowners where interest rates are concerned. Their joint article talks of mortgage interest rates returning to their sub-1% levels of 2016 and even of the Bank of England imposing a zero rate to ease the transition to a new trade arrangement with the rest of the world.Such a move would undoubtedly be welcomed by homeowners who suddenly find their mortgage rates significantly reduced. But the other side of that coin, of course, is the resulting misery for savers and investors.As for house prices and whether now is the time to buy or sell, the same article suggests that trying to predict whether to move before or after October 31 is more likely to be a lottery.Having said that, the fact remains that if you consider your finances to be insulated from the immediate impact of Brexit – whether with or without a deal – then when you move is less of an issue.The only question at that point is whether you can sweeten the process by winning out on the price at which you agree to buy and securing the market value of the house you sell.The Daily Mail’s financial website This Is Money reports that there’s been a growth in the appetite for long-term mortgage deals, including the recently-trending 10 year fixed product some lenders are offering.As I said in our recent article on whether you should fix your mortgage rate, we’d advise caution when it comes to locking on to a long-term deal. They tend to be more expensive and if rates do come down – which is a distinct possibility over a period of a decade – then you’re going to lose out in the long run.There are circumstances where a long-term fixed product might be right for you – but I would strongly advise getting advice from a professional mortgage expert before you commit.And then  there are the conflicting calls in the Express and Times for the Bank of England to either raise interest rates and demonstrate its commitment to – and confidence in – Brexit (Express), or cut rates ahead of Brexit to ease the impact on the economy (Times). So, even the papers are divided on the best approach to fiscal policy.The fact is, we won’t have true clarity until October 31 arrives. In the meantime, the world keeps turning and life goes on.My advice is always that you should take any long-term financial decision – such as buying a house – in the context of your long-term financial security, and ultimately that comes down to the answer to the question of whether your potential financial exposure is controllable.Any investment is a risk – but calculated risks, where you’ve looked at the worst-case scenarios and demonstrated you can survive them, are always going to be preferable to walking into a commitment blind.The best thing you can do if you’re thinking about moving in the next three months is get some advice from a professional broker and a financial adviser – and factor that advice into your decision.  Need more information about your mortgage options? Take a look at our short guide to remortgaging. To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063.Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct AuthorityYour property may be repossessed if you do not keep up repayments on your mortgage.Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.

by Oliver Whitehead  -  19 August 2019

First Time Buyer

Anyone who’s looking to get their foot on the first rung of the housing ladder or has just managed to find their way onto it will know that being a first-time-buyer can be an extremely challenging and stressful time.You’d almost have had to have been living under a rock to have missed the fact that the turbulence of the last post-financial crisis decade has made the lending environment a darned sight tougher than it was for the previous two or three generations.But it’s not just the rigour of affordability tests that you’ll have to contend with as a first-time-buyer. You’re also going to feel hamstrung by your lack of experience in the market, and that’s something that many people underestimate when they set out to buy their first house.But first things first. Let’s deal with the first obstacle. Deposit & Affordability The simple fact is that whether this is the first house you’ve bought or the fiftieth, you’re going to have to prove to prospective lenders that you can pay back the money you want to borrow.This is the first and most important hurdle you’ll need to clear – if your lender decides you can’t afford the repayments, then everything else is immaterial.And if you can’t buy the house on your own? Well, there are still options available to you. Some lenders now offer products that allow a family member to guarantee or underwrite the repayments.Or, it could be that you know other people who might be prepared to buy the property jointly with you and view their share of the ownership as a long-term investment.In both cases, though, it’s wise to get professional advice to make sure you don’t find yourself under pressure to sell quickly and unexpectedly in the future.There are now more mortgage products on the market that will allow you to borrow the entire cost of a property – these are known as 100% mortgages. But attractive as these may be, consider them carefully because there are downsides (e.g. it’s easier to fall into negative equity if you have no capital tied up in your home).In any event, the more attractive mortgage products that will be available to you are likely to require you to put up some of the cost yourself in the form of a deposit – and having something to put down also reassures the lender that you recognise the scale of the financial commitment you’re making. Making a mortgage application You could apply for your mortgage online or in a lender’s branch. But it would probably serve your best interests to talk to an independent mortgage broker to get access to products you won’t be able to find yourself.There are very clear benefits to working with a professional mortgage broker.At Oportfolio, for example, we’ll advise you on affordability, the best way to structure your loan and the benefits of each product you might want to consider – but we’ll also look after your application from the point you start to the point you receive your mortgage offer and beyond.You’ll need to have quite a bit of personal information to hand to complete your application, but your broker will walk you through that, too.If you’ve already found a property you love, the estate agent you’re dealing with may push you to make an appointment with their in-house or preferred mortgage adviser. The only thing to know here is that there’s no obligation for you to do that unless you want to.It’s a good idea to get a mortgage offer in principle before you start house hunting. Most agreements in principle are valid for between 60 and 90 days, giving you a good amount of time to find a property and make an offer.Making an offer So, you’ve got a mortgage agreed in principle and you’ve found your dream home. How do you work out what to offer?To some extent, of course, you’re going to be constrained by the amount you’ve been told you can borrow. If you’re like most of us, you’ll probably have been including in your search properties that are slightly out of your budget in the hope you might be able to get a lower offer accepted.This is where your agreement in principle comes in handy because as a first-time-buyer with no chain and a mortgage already approved, you’re going to be more attractive to a seller who needs to shift their property to get the upper chain moving.To get a real sense of how much the house you want is worth, do some research. Find out what similar properties in the area have sold for in the recent past.What motivates a homeowner to sell is hard to guess. They may need to sell their property at the very top of its value to make their own step up the ladder. They may have priced their home to sell quickly because they’ve seen something they like and want to move fast. Or they may just be testing the market and are prepared to wait for the right offer.In the end, though, a house is only ever worth what someone’s prepared to pay for it – so knowing your own limit will allow you to make a confident offer. Oh no – my offer has been rejected! You really want the house, but the current owner has said no to your offer. Although this is disappointing, it’s not the end of the world. You have two options – either increase your offer if you can afford to (but it’s good practice to know the price beyond which you will not go) or walk away and find something else you love. The survey suggests there’s a problem This can be a minefield. If the problem is serious, it may prevent you from securing your mortgage (which will have been offered in principle on the basis the property you want to buy is sound).If it’s not a problem so serious as to be a dealbreaker, then can you afford to make the necessary repairs?Alternatively, can you use the problem to renegotiate your offer and then talk to your mortgage lender to see if you can use part of the loan agreed in principle to carry out the repairs? Again, a professional mortgage broker can help you here.There are few problems which are insurmountable in a property deal, but knowing how to circumnavigate the bumps in the road is easier when you have sound advice to work with.Remember, too, that you will need to appoint a solicitor or specialist conveyancer to take care of the legal stuff related to your purchase. Your mortgage broker will probably know someone they’re happy to recommend – but also ask for recommendations from friends and family.Above all, enjoy yourself – finding and buying your dream home should be an adventure, not a chore!Watch our video for first-time buyers and get a headstart on the things you need to consider when you start looking for your first home. To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063.Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct AuthorityYour property may be repossessed if you do not keep up repayments on your mortgage.Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.

by Oliver Whitehead  -  16 July 2019

First Time Buyer

If you search on the web for advice on the things you should do when choosing a mortgage, you’ll get a lot of information back. Some of it’s good, some of it not so good. But as important, if not more so, is what you should avoid doing.Here’s our guide to the mistakes you’d do well to avoid making. Don’t approach your hunt for a mortgage in the same way you would if you were buying a washing machineWe know that sounds obvious, but you’d be surprised at the almost laissez-faire way a good many people approach the business of securing the finance to buy their home. Put simply, buying a home is a huge investment – and almost certainly the largest single purchase you’ll have made in your life at that point.It’s fine to buy a washing machine from Amazon or another online retailer. If it doesn’t work, you send it back. If you realise there was a better model you could have bought, it’s not a calamitous financial mistake to have to live with.Choose the wrong mortgage provider or product, however, and you could be paying for it – literally – for years. Don’t obsess about the interest rateWe’ve said this before, but it’s worth repeating. If the only thing you’re looking at is the interest rate, then the chances are you’re missing a trick.Yes, how much you’re going to pay each month is important and so that means the rate is a factor in your decision – but it’s not the only factor. Is the rate fixed or variable? If it’s fixed, how long is it fixed for? Are there early exit fees? Is there an arrangement fee? Will you be able to overpay if you want to, and if so, by how much?Just as importantly, is the mortgage provider reputable and do you believe you’ll get good support and care during the lifetime of the loan? The days of personal 121 contact with an account manager may be over, but your relationship with your lender remains just as important today as it always did. Don’t chase lower rates at the expense of lender reputation Even if you do put a lot of store by the interest rates on offer from lenders, they don’t always tell the whole story.If you saw what looked like two very similar cars on offer from two different dealers, and one was significantly cheaper than the other, you might be tempted to buy the cheaper of the two. But it’s always worth taking a pause for thought.There could be legitimate reasons for two apparently identical mortgages being offered at different rates of interest. It could be that one lender is squeezing as much margin out of the loan as possible to maximise profit. Equally, it might be that they’re a bigger, more well-established and reputable lender, with bigger overheads and better overall service. Don’t take a mortgage from an unregulated lender If you do nothing else (and we hope you’ll do a lot more than this), don’t take a mortgage with an unregulated lender, because when things go wrong, you have no easy recourse to get them put right.Unregulated lenders aren’t subject to the same lending standards as regulated banks and building societies and don’t offer the same protection.Do your homework and ensure your lender is reputable and regulated by the Financial Conduct Authority. If you’re in any doubt at all, hit the pause button and reconsider. Use a professional mortgage broker If you only follow this final – and, we’d obviously argue, most important - rule, you’ll also avoid making the first four mistakes, too.A good, professional mortgage broker will also be regulated – giving you protection against bad advice – and will know the market inside out. They’ll know what deals are available, what products will best suit your circumstances (not just today, but in the longer term, based on your priorities and ambitions) and the lenders who can offer you the best options for buying your home.At Oportfolio, we’re mortgage experts regulated by FCA and with years of success behind us – so if you’re ready to take the next step in your property journey, we’re ready to help you. Want to know how other clients felt about working with Oportfolio? Watch Gus and Selena’s video story!  To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063.Your property may be repossessed if you do not keep up repayments on your mortgage. Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.

by Oliver Whitehead  -  11 April 2019
Disclaimer

Your property may be repossessed if you do not keep up repayments on your mortgage.

Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage / further advance of £395.
Our Product Transfer fee is £295.

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