Help for FTB - clueless!

Skint_Catt

Hi guys,

Ok, I'm just looking into buying a property, but I have absoloootly no idea where to start with mortgages.

Can anyone offer some basic outlines on the benefits of the different types of mortgage, what to look for so you can move to find the best deal fairly regularly, and catches that can apply.

I assume the discounted rate is best initially as you have so much else to pay for - but is this correct??

Only able to borrow (and pay back) £45,000 but hope to have 10% deposit. There are a few properties around.

Also if anyone can suggest books or website with advise in basic terms it would be so much appreciated.

Thanking you

garysletters

probably best to post this in the mortgages section.

My opinion......dont get a moprtgage with redemption overhangs,
dont forget that remortgaging costs money (admin fee to previous lender, legal costs, valuation costs, application costs, and other hidden costs like complsory insurance with lender etc!!!)

changing lender every year for the cheapest deal isn't necessarily the cheapest option.

Elliott_Woods

Go to an independent financial adviser - and ensure that they do not charge any "arrangement fees". A good financial adviser will only take the commission from the company supplying the product. He will shop round and find you the "best deal".

Changing Lenders every year is easier nowadays than a couple of years ago and not as expensive as you think.

bert

This site has recently been launched to help FTBs

http://www.firsttimebuyerhelp.co.uk

gundo

Just been through the process you're going through, I'm a FTB as well.

Read the advice on mortgages on this website, Martin's got loads of useful tips.

Read the section on mortgages in Martin's "The Money Diet" book.

I also found the Motley Fool website handy as well

http://www.fool.co.uk

HTH - Gundo

m00nie

skint cat, i moved your thread over to the mortgage section for you as you may get more replies/advice.

cheers

m00nie

Skint_Catt

Ok, thanks m00nie, started out as buying house but ended up more leaning mortgage way, sorry!

thanks all esp for the websites.

Just deciding now whether to take the plunge or not bother!

S_C

KK

I agree with all the advice so far, but I would add that I think a repayment mortgage is the best (in my opinion), rather than an interest only one with an investment plan linked. A repayment guarantees your mortgage is paid at the end of the (normally) 25 year term and each month you pay a combination of interest and capital back. Don't pay a Mortgage Indemnity Guarantee if you can (not all lenders charge them), you may have to pay a set up charge for arranging a mortgage (e.g. fixed or discounted rate), find out about all the associated costs with buying a house, like search fees, solicitors fees, moving costs etc, as it all adds up.

Think about how long you plan to live somewhere (realistically) and fix your rate for this amount of time - 2-5 years is a fairly reasonable amount of time as beyond that circumstances can change hugely - marriage, children, job change etc.

Also, I would look into whether you can afford the mortgage on your current salary if the interest rate were to go up by a couple of percent as that is often where people are caught out. A mortgage that you can afford now at say 4.5% may be a lot less manageable at say 6.5%. Also, I would suggest if you can easily afford the mortgage you are planning to take out, try making the term shorter e.g. 20 years, or overpaying each month as this pays off the mortgage quicker. Also make sure the company charges interest on a daily, not an annual rate. Most first time buyers are struggling to pay a mortgage though, but flexibility is quite useful. Even overpaying by £50 per month can make a difference to when a mortgage is paid off. Mortgages have changed a lot since I first took one out 13 years ago, but there is a lot more choice. I am currently paying 5.25 % and my husband at one point (before we were married) was paying nearly 16% - that is 3 times what we pay now - a huge difference. I had a really good book called the Sunday Telegraph Guide to Buying and Selling a House (or similar title) and it was fully of easy to understand info. Also Martin's Book has info on mortgages. All the above info is based on my own experience, not on official advice by the way.

Good luck