Preparation, Preparation, Preparation - The Key to Success in the Mortgage Market
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It's understandable that first time buyers can feel rather swamped with information when looking into property and mortgages for the first time. There is a lot to take in, and unfortunately the confusion of the process can lead to hasty decisions that ultimately backfire. The key thing to remember as a first time buyer is the importance of preparation. In every step of the process of getting your first mortgage, you need to know what you are looking for, what to expect, and not find yourself facing any nasty surprises. Preparing for Your Deposit. Before doing anything else, it is vital that you sort out some money as a provision for your deposit. In the hectic rush of sorting out a mortgage, it is easy to leave thinking about your deposit until the last minute - something which can be a crucial pitfall for many first time buyers. Finding yourself suddenly having to produce a large sum of money out of thin air is not a comfortable situation to have sprung upon you, so be sure that you are prepared. Find a bank with a really good savings account (Alliance & Leicester offer an eSaver account with 6.50% AER variable for £1 to £500,000, and ASDA's Internet Savings Account gives you a choice of monthly or annual interest) and put aside some money that can accumulate interest over time and sort out your deposit easily. Preparing for the Jargon. As with most financial processes, the mortgage market is swamped in terminology and jargon that can seem alarming to the first time buyer. Don't let yourself be put off by the terms that you don't recognise, and don't be embarrassed to ask either - if you agree to something without knowing what all the terms signify, then you could find yourself in a tricky situation later on in the term when you, for example, pay money back early without realising that your mortgage broker will charge you for early repayments. Most mortgage brokers have FAQs and glossaries on their sites, or you can try the FSA's jargon buster on www.moneymadeclear.fsa.gov.uk, which provides a comprehensive list of terms and their meanings. Preparing for the Repayments. When you're sorting out the term of your mortgage and therefore the size of your repayments, do not be tempted to rush the process. Take time to work out exactly what you can afford (you can find a mortgage calculator online to help) and be prepared to plan for changes in your situation - if you may find yourself unable to meet repayments, or eager to pay everything back early, either be more conservative about your repayments or make sure that the mortgage you choose allows for flexibility. As long as you remember the importance of preparation and thinking in advance, you should be able to navigate the mortgage market without too much trouble, and hopefully won't find yourself in hot water due to any unexpected fees and costs. Rates and products quoted are correct at the time of writing (19.06.08) and may be changed at the discretion of the provider.
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