Getting a mortgage is typically the first step when buying a house. You may have been searching for weeks to find your dream home. However, before you can put in a serious offer, you must have financing in place. In most cases, you would arrange to get an Agreement in Principle from a mortgage lender to know how much you can afford.
Getting a mortgage is like venturing into unchartered waters if you are a first-time buyer. There is so much mortgage jargon to get your head around that you may not know where to start.
We can help you through that process with clear and personalised advice. So, if you’re looking for a mortgage, as first-time buyer, or otherwise, get in touch with our team of mortgage advisers today on 028 90 288585, or by emailing as at enquiries@aims-ni.co.uk.
In the meantime, this quick guide to getting a mortgage, will help you understand the basics.
A mortgage is a type of secured loan by a building society or bank to finance purchasing a house. The loan is secured against your home, meaning that the lender can repossess the property if you fail to make monthly repayments. There are also specific mortgages for first-time buyers and to purchase buy-to-let properties.
Most people don’t have enough money to buy a house outright. This means they must take out a loan that they repay over many years, typically 25 to 30 years. Then, the lender (mortgagee) pays regular monthly instalments to repay the mortgage amount plus interest.
The first step to getting a mortgage is to save for a deposit. Typically, you will need around 20% of the mortgage amount as a deposit. So, suppose you want a mortgage for £100,000. In that case, you will need £20,000, and the mortgage lender provides 80% of the purchase price.
In addition to saving for a deposit, you will need enough money to pay additional mortgage costs. These typically consist of the product fee, valuation fee, and application fee. Depending on the lender and type of mortgage you require, mortgage fees can cost between £2,000 and £3,000.
Buying your first home can be daunting, and many first-time buyers struggle to save for the deposit. Therefore, some mortgage lenders provide mortgages for first-time buyers with a low deposit and waive some mortgage fees. However, this may mean that your mortgage costs you more in the long run due to higher interest rates.
If you are buying your first home in Northern Ireland, then you could consider a shared ownership scheme. This makes it more affordable for prospective homeowners to get on the property ladder.
However, in all cases, it’s best to get personal advice from a mortgage adviser.
It pays to shop around to find the best and most affordable mortgage for your needs. Different mortgage lenders offer varying upfront fees and interest rates. And it can be challenging to calculate the overall cost of the mortgage.
The best way to compare mortgage rates is to look at the Annual Percentage Rate of Charge (APRC). All mortgage lenders use the same formula to calculate the annual total cost of the mortgage, this includes fees, charges, and the standard variable rate for the full term.
For more clarity on the deals which will best suit your circumstances, get in touch with our team.
Before agreeing to give you money to buy a house, a lender must make sure you are not a financial risk. Therefore, the lender checks your income and credit history to determine your ability to repay the mortgage.
Here are several steps you should take before applying for a mortgage:
After ensuring you can afford the repayments, go to a lender to get an Agreement in Principle. This will let you know how much you can borrow. After receiving the certificate, you are ready to start house hunting and put in an offer on a property. If your offer is accepted, you can then take out a mortgage.
For more clear and personalised mortgage advice get in touch with our team of mortgage advisers today on 028 90 288585, or by emailing as at enquiries@aims-ni.co.uk.
For more clear and personalised mortgage advice get in touch with our team of mortgage advisers today on 028 90 288585, or by emailing as at enquiries@aims-ni.co.uk.
THINK CAREFULLY BEFORE SECURING DEBTS ON YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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