First Time Buyer Mortgages
Buying your first home can be a daunting as well as an exciting prospect. Let us help you through the mortgage process, making it simple and easy to understand. We will assess your mortgage affordability with you before you start your property search to ensure you are looking within your budget and to help you to find the right home.
We will research the mortgage market to assess which lender would best accommodate your situation and which is offering the most competitive deal. We will advise you on the different mortgage types available so that you are able to make an informed decision on what type of mortgage would be best for you.
There are predominantly a few different types of mortgages to consider:
Fixed rate mortgages
These mortgages fix the interest rate applied to the mortgage for a specific term. We would recommend this type of mortgage for people who like the certainty of knowing what their monthly mortgage payment will be for the foreseeable future as this enables a person and/or family to budget their monthly costs accordingly. The majority of our clients do tend to choose either a 2 year or a 5 year fixed rate. However, with the current cost of living crisis a fixed rate of at least 5 years has become very appealing. The only negative with a fixed rate is that you will not benefit if interest rates were to fall and you would therefore end up paying more then you would on a variable rate mortgage. The other negative is that fixed rate products generally come with high early repayment charges which would be payable if you were to redeem the mortgage within the fixed rate term. However, most products do allow you to port the mortgage to another property, albeit with a new mortgage application
Once the fixed rate term is over the mortgage will revert to the lenders standard variable rate. At this point we would discuss your requirements with you and look for a replacement mortgage product for you.
These mortgages are a type of variable rate mortgage with an interest rate linked to the bank of England base rate. The level of the margin above base rate along with fees and other terms varies from lender to lender along with the associated fees and terms. When interest rates are unpredictable this is not a type of mortgage product we would normally recommend to our clients as it does not presently give financial security in an uncertain time. However, when rates are more steady this type of mortgage can prove to be more economical.
Variable rate mortgages
This type of mortgage is similar to that of the tracker mortgage however, the interest rate followed is that of the lender. It is the lenders default rate and generally more expensive than a tracker product. Each lender has its own standard variable rate which if you had a fixed rate mortgage and you came to the end of the term you would roll onto the lenders standard variable rate unless you opted to remortgage/switch to a new product beforehand. The main positive with this type of mortgage is that you have the freedom to redeem the mortgage with no early repayment charges so it could be appropriate for a shorter term mortgage.
These mortgage products are essentially a type of variable rate mortgage product. Whereby they offer a discount on the lenders standard variable rate for a set period usually with a penalty to be paid if the mortgage is redeemed before the end of the scheme period. Whilst these discount products can seem attractive the lender is free to increase its standard variable rate at any time, thereby increasing your monthly mortgage payments.