1st time buyer needs help

pinkfoxy

Thanks for looking

I'm a first time buyer looking to get a mortgage for £37000 on a property valued at £70000. I'm earning £14500pa and would like any advice as to who the best lender would be.
I'm lost with all the jargon that ive come across whilst having a look around for the best option for me could anyone put it in plain english things like redemption, higher lending charges and does the initial monthly payment stay like that for the full term if its a repayment mortgage.

Cheers for any help :beer:

herbiesjp

Who the best lender will be, will depend on what exactly you are looking for.

Redemption or Early Repayment Charges = if a lender offers a particularly good interest rate/deal the mortgage will normally have these Early Repayment Charges. They are like a penalty for moving away from the lender whilst you are still on the lower interest rate

Higher Lending Charge (HLC) = is another type of fee. This fee is applied by different lenders at different levels, however most have this fee is you have less than 10% deposit. The HLC is like an insurance policy that you pay for the benefit of the lender, so that if you default on the loan they can recover their money. This can be paid up front or added to the loan.

Based on your figures however a HLC should not apply as you are borrowing just over half of the value of the property.

When you get an illustration, it will show you what your monthly mortgage payments will be in certain circumstances:

1) on the lower introductory interest rate
2) and then on the rate your mortgage moves onto afterwards

If you have chosen a fixed interest rate, then your mortgage payments will not move for the perios of time you have fixed the interest rate for i.e. 2,3 5, 7 10 years

However, if you chose a tracker, discount variable rate, then these can move as and when the bank of England changes interest rates or when a lender decides to change its own standard variable rate - the bottom line here is that they move and therefore not be the same.


If your budget is fairly tight or you want the security of knowing that, for say, 5 years you know exactly what you wil be paying thena fixed rate could be for you. If on the other hand you like the risk of interest rate fluctuations then chosing a variable rate could be for you.

If you have any other outstanding debts i.e. loans or credit cards, this could affect the maximum amount a lender could look at lending.