Three Handy Hints about Mortgages for First Time Buyers
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Buying your first property and taking out a mortgage can be a baffling process which isn't helped by the vast number of mortgages that are available today being thrust in your direction with no real explanation. This is not a process to be entered into lightly, and it's definitely worth doing your research first so that you have a clear idea of what to be aware of in the mortgage market. Don't Rush The Process. Before deciding to take out a mortgage, really take time to think about whether it's the right time to be doing it. Mortgages are a big commitment, and can be very costly so if there's any chance that your finances might be about to take a dip it may be worth holding off until your situation is more stable. If you do decide that now is the right time, then make sure you have enough in savings to guarantee that you don't feel the pinch of the deposit. It's easy to forget that your loan comes with a significant deposit first, so don't be taken by surprise. Banks like Alliance & Leicester and HSBC offer savings accounts with differing rates to cater to all customers, and it's worth sorting one out before moving forward with your mortgage plans. Do Your Research. It sounds obvious, but in reality it can be all too easy to tire of the research process, or to simply underestimate how much background knowledge you should have. As well as familiarising yourself with the key terms and jargon in the mortgage market (see the Jargon Buster on the FSA Money Made Clear website) and checking out a wide selection of different offers from different brokers, it's also important that you look to impartial advice resources so that you don't find yourself being surprised by an unexpected fee, cost or change to your mortgage. Also, it is very important that you read the small print. It may seem tedious, but it's worth it not to be caught out by a clause that you hadn't noticed before signing for your mortgage. Be Sensible About Your Term. When you're sorting out your mortgage, it can be tempting to think on the positive side and go for a shorter term, hoping that you'll be able to be rid of it sooner rather than later. However, this can be dangerous if you don't have a very stable and certain financial future - if anything changes unexpectedly and you find you can't meet repayments, your home could well be the price you pay. Equally, don't get too nervous and sign yourself up for a ridiculously lengthy term - you'll only end up paying more in interest, and could find yourself facing early repayment fees if you get sick of repayments and want to end your mortgage early. Ultimately, everyone will have different needs from their mortgage, but as long as you are prepared and know precisely what you're looking for then the process shouldn't be quite so scary. Rates and products quoted are correct at the time of writing (18.06.08) and may be changed at the discretion of the provider.
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