Getting on the property ladder is essential, and there are so many pitfalls that you need to try to avoid here. It is essential to try to make the best possible choice when it comes to getting a mortgage and buying a home for the first time. Buying your first property is a thrilling experience, but it can also be a highly stressful one, as well.

There is a lot to think about, and it is important that you think about some of the best things you can do to make the right choice here. There is a lot to cover, so we’re going to dive in and look at some of the essential elements that you have to factor in when it comes to your mortgage as a first-time buyer.

How much can I borrow?

When it comes to your mortgage rates and how much you can borrow, this is generally worked out by your salary, outgoings, and credit history. Other factors, such as the number of dependants and any outstanding debts, also play a role. Mortgage brokers will also consider additional income, such as investments or excess earnings. It is important to make sure your financial situation is the best it can possibly be before applying for a mortgage.

Mortgage rates & fees

Mortgage rates and fees are also an important consideration. Rates are calculated depending on whether you go for a fixed or variable interest rate. As a first-timer, fixed rate could be a preferable choice because it means that the interest you pay can’t rise for the term of the deal.

Fixed-rate mortgages are usually agreed for a period of 2-5 years, while variable rates can fluctuate and are affected by the Bank of England, as well as by lenders. You also need to be aware that some mortgages come with a fee attached, and this can be any amount up to 1% of the mortgage total!

Government initiatives & guarantors

There are other ways of being able to secure a mortgage that are perfect for people who may not have a lot of money. One of the ways is to get a family member as a guarantor for your mortgage loan, though this is uncommon.

Another thing you need to keep in mind is that there are plenty of government initiatives designed to help first time buyers, such as the Help to Buy ISA. This is where you open a specific account, and the government will match whatever you save up to a pre-agreed amount.

There is also a Help to Buy initiative where the government will lend you 20% as an equity loan. Shared ownership is another possibility, where you buy a portion of the property and rent the rest. There are a lot of options available for first time buyers who may not have a lot of money for a deposit upfront.

Additional fees

You also need to be aware of additional costs that are sometimes involved when you are a first time buyer. Things like property surveys, conveyancing fees, and stamp duty can all mount up to add significant extra costs to the price of a property. And this is something you are going to need to factor in when it comes to buying a home for the first time. Add to this things like solicitors fees and insurance, and you could well be looking at a significant outlay.

As you can see, there is a lot to consider as a first time buyer, and you need to know what to look out for. There are plenty of factors to keep in mind when you’re looking to make the right choice. This is why you need to understand the mortgage process and what it entails right now so you can make the most of this.



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