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First time buyer mortgage advice

First-time buyer mortgages

Getting your first mortgage is one of the biggest financial decisions you will ever make.

With high property prices it is important for first-time buyers to find a mortgage they can afford and can help them on to the property ladder. There is no point in over stretching yourself with mortgage repayments if you cannot afford to furnish your new home and enjoy it in full.

You have to decide whether to opt for a fixed-rate deal – providing set repayments for a fixed term, usually two-years – or a tracker mortgage that follows the Bank of England base rate.

Offset mortgages, that balance savings and current accounts against the mortgage balance, are also an option, along with a myriad of discount rate deals.

With budgets for first-time buyers often tight a high loan-to-value mortgage may be needed – although it is important to factor in any fees lenders may charge for higher value mortgages.

Another issue to face is whether to choose a repayment mortgage or an interest-only mortgage. Monthly repayments are lower with an interest-only mortgage, but you are not repaying the capital on the mortgage, so it may only be a short-term option.

Once you have a mortgage deal in place from a lender, heading out into the property market will be much easier with a set budget and your first home in your sights.

 

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