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 Buying
a house for the very first time is an exciting prospect as you make your
start on the road to home ownership. The good news is that Mortgage lenders
are extremely keen on first time buyer business, resulting in a huge
number of mortgage schemes that are widely available. Our job at Home
Counties is to try and help make the mortgage process as simple as possible
and help you get the best first time buyer mortgage deal.
Finding the right home is important but so too is the affordability
of your new loan. If you are thinking about buying a property in
the near future we suggest you telephone our offices and request
a visit from an adviser.
They can discuss the different mortgage schemes that are available
and what level of borrowing you may be able to afford. We will then obtain an agreement
in principle from one of our lenders which would then allow you with
a degree of confidence to go and find your property.
Most lenders will offer you a slightly better interest rate if you
have a 5% deposit saved but 100% loans can still be sourced if not.
You should also be aware that there are a number of other costs associated
with the purchase that you will need to budget for. These include:
STAMP DUTY: This is a tax that applies to the purchase
of land/buildings over £125,000 unless the land is in disadvantaged
areas where different rates apply. If you are buying over £125,000
but up to £250,000 you will be charged 1% of the purchase price.
For properties over £250,000 but up to £500,000 you will
be charged 3% of the purchase price. Stamp Duty for properties over £500,000
amounts to 4% of the purchase price.
HIGHER LENDING CHARGE: This is charged by the lender
if you borrow over a certain percentage limit, which is normally 80%.
This insurance is classed as additional security for the lender and
will protect them in the event of the property being taken into possession
and being sold for less than the mortgage debt. The typical cost
will vary in line with the purchase price of the property but expect
to pay in the region of £1,000
if you were taking out a 95% loan on a purchase price of £150,000.
Some lenders will add this premium to your loan whilst a number
of lenders do not now charge for this policy. The latter option
can obviously represent quite a significant saving and as a matter
of course we would normally look closely at these lenders when
discussing your mortgage requirements with you.
LENDER FEES: Costs will vary according to the product being taken
but expect to budget for both administration and valuation fees.
These costs can be confirmed once your lender and product have
been decided upon.
SOLICITOR COSTS: Expect to pay in the region of £1,000
based on a property purchase price of £150,000. This figure will
include your solicitors fee as well as local search and the land registry
fees. Whilst you will want to try and keep your costs to a minimum
do not underestimate the importance of getting a good solicitor who
will keep in touch and ensure the transaction goes through smoothly.
If you can, get a recommendation from friends or family for someone
they know and have used before. When you apply for a mortgage loan,
a lender will normally carry out a credit search on you. If you would
like to find out more about your current credit rating we would recommend
you visit www.myequifax.co.uk who
can produce an online report for you. The current cost of a report
is £11.75.
To find out more about first time buyer mortgages please
call 01494 680700 to speak to an adviser.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP
UP REPAYMENTS ON
YOUR MORTGAGE |
