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First time buyer mortgage advice
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A range of questions here.
As a first time buyer what is the best way to get a mortgage? Is a mortgage broker the way to go rather than going straight to the banks and if so how exactly do they work, what advice and assistance do they actually provide? Are they on commission at all or are they completely impartial?
As a first time buyer what is the best way to get a mortgage? Is a mortgage broker the way to go rather than going straight to the banks and if so how exactly do they work, what advice and assistance do they actually provide? Are they on commission at all or are they completely impartial?
Answers
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Download the mortgage guide on this site, and read the article re brokers
http://www.moneysavingexpert.com/mortgages/
http://www.moneysavingexpert.com/mortgages/
A bank will probably only sell their own products, whereas a good broker, will search the entire market for the best deal, to suit your requirements.
Most brokers are paid by the mortgage provider, but they usually reap their money back, by charging the client an arrangement fee, which varies from product to product. This can be as much as 2% of the mortgage.
The broker I use, will meet me and go through different products. Some of these may include free legal and survey fees. For me, the most important aspect was having the lowest interest rate available.
You also have to consider whether you want a Repayment or Interest Only mortgage. If you are buying the property as your main residence, then a Repayment would be best, as you will be paying part of the loan and the interest at the same time, therefore, reducing the mortgage over 25 years.
With Interest only, you are only paying the interest on the mortgage, not the loan, so at the end of the term, you will still owe the cost of the property, so would need to find a way of paying this back to the bank or sell the property and hope it sells, at the very least, for the sum you purchased it.
Repayment mortgages always work out more expensive, so your monthly mortgage repayments will be higher than if you had an interest only product.
Most brokers are paid by the mortgage provider, but they usually reap their money back, by charging the client an arrangement fee, which varies from product to product. This can be as much as 2% of the mortgage.
The broker I use, will meet me and go through different products. Some of these may include free legal and survey fees. For me, the most important aspect was having the lowest interest rate available.
You also have to consider whether you want a Repayment or Interest Only mortgage. If you are buying the property as your main residence, then a Repayment would be best, as you will be paying part of the loan and the interest at the same time, therefore, reducing the mortgage over 25 years.
With Interest only, you are only paying the interest on the mortgage, not the loan, so at the end of the term, you will still owe the cost of the property, so would need to find a way of paying this back to the bank or sell the property and hope it sells, at the very least, for the sum you purchased it.
Repayment mortgages always work out more expensive, so your monthly mortgage repayments will be higher than if you had an interest only product.
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