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Claiming Your First Mortgage...
by Jason Samuel
http://www.awisemortgage.com
When we take on our first mortgage (in French meaning death
guarantee!) it is a huge step in our lives and one that we
could well still be paying thirty years later. Some people
thrive on the challenge, others fail to maintain the
repayments and have their homes repossessed whilst the
majority continue to plod through their lives moaning about
their repayments but contented to be home owners.
When you start thinking about buying you'll need to study
the market to know what you can afford. We all want the
prettiest house which is probably just a little too
expensive. Look at the long term vision. Why is one house
likely to appreciate much more than another? Make decisions
through your head rather than your heart! Whilst you're
looking, take time to give yourself a budget and to start
saving. If in doubt, always buy into a location rather than
the specification of the property.
It's also worth having a survey completed on the property.
Eventhough it can be expensive, it's much better to know
before the deal is completed and you're committed. It is
possible on some properties to have a one hundred per cent
mortgage and because competition is now so fierce it's
actually possible to negotiate a one hundred and twenty
five per cent mortgage which will give you spare money to
carpet and furnish the house. You have to be careful,
however. The chances are that the interest will be higher
and the property will have to be perfect (probably a brand
new build). You'll also be required to sign a Mortgage
Indemnity Guarantee (a MIG) which will add a percentage on
to your repayments and needs to be weighed up against the
opportunity to get onto the housing ladder.
Make sure that the monthly repayments are clearly
explained to you and that you feel comfortable that you can
live on what you have left after your repayments. You'll
have all the day to day bills; rates, electricity, gas,
phone, water etc. and these are sometimes swept under the
carpet by companies who are desperate for you to buy their
properties. You'll be given the choice of either a fixed
term or a flexible mortgage. A fixed term will probably
charge you a slightly higher interest rate but you know
that this will be your repayment for the length of the
fixed term. With a flexible loan you could well start
off with a good deal, but, depending on where the markets
go, you could be left vulnerable.
It's worth spending time and energy negotiating the best
deal. There are just so many companies offering variations
that it changes overnight (or even over the course of a
phone call) but a good deal can save you many thousands of
pounds. In addition to the savings, check that there aren't
penalties if you want to move to an alternative lender
before the term finishes.
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