BUYING YOUR FIRST HOME – WHERE DO I START?

Nick Hepburn, Financial Adviser

Buying your first home is very exciting but can also be quite stressful.  I know this from first-hand experience, having bought my first property last year as well as helping other First Time Buyers as an adviser.

A good place to begin is to work out your budget and look at how much you think you can afford for the monthly repayments. If you have previously rented a home, you may have an idea of what you are able to afford based on the rental payments.

Historically, a lender would simply offer a mortgage amount based upon a multiple of your income, but nowadays it’s more about affordability.  Lenders will look at your outgoings as well as your income (bills, credit cards, other loans and debts) and work out the disposable cash you have each month.

This can get tricky and the criteria for each lender will vary, which is why it can be sensible to take advice from a qualified mortgage adviser.

There are mortgage repayment calculators available online to help give you a better understanding of how much a lender would be willing to lend and what the monthly repayments would look like.  Most lenders will offer these so a good place to start would be with who you hold a bank account with. Other high street banks like Barclays and Santander offer a good calculator.

WHAT DEPOSIT WILL I NEED TO GET A MORTGAGE?

There are many different mortgage products available on the market and, typically, you will need a minimum deposit of 10% to get a wide range of choice.  There are lenders who offer lower deposit mortgages but, as you might imagine, these often have higher interest rates.

The general rule is, the bigger the deposit, the better the interest rate and the lower your monthly repayments will be.  So if you have the opportunity to push the deposit up a bit, (possibly asking family to help), it could be very beneficial.

PROTECTION – DO I NEED PROTECTION WHEN TAKING OUT A MORTGAGE?

One area that is vital to consider when buying a home is protection.  How would you make your monthly mortgage payments if you were unable to work?  How would your family cope financially if you died?  Protection comes in many forms, from life assurance and critical illness to income protection, with options to cover almost every possibility.  It’s my job to make sure you have the right protection in place for your circumstances, just when you need it.

You wouldn’t buy or rent a home without home or contents insurance. You wouldn’t buy a car or holiday without insurance. So why would you not want to protect yourself and your family against death or serious illness?

Life can be complicated and unpredictable. Insurance exists for a very good purpose to help you maintain what you have in times of hardship and provide security for your loved ones.

FINALLY A FEW QUICK TIPS

  • Check your credit file – you can obtain copies of your credit file from credit reference agencies such as Equifax, Experian and TransUnion, or all three on Checkmyfile. No need to pay for these and can often sign up for a free trial.
  • Don’t miss payments or make late payments – this may result in you losing your home. If you’re struggling to pay, contact your lender to make them aware, as they may be able to offer a solution.
  • Keep other applications to a minimum in the months before applying for your mortgage – too many new commitments will leave a footprint on your file that can impact your chances of obtaining a mortgage.
  • Budget for additional fees – including solicitor fees, moving costs and a shopping trip to IKEA

Once you’ve done all that, you can enjoy life in your new home!

If you or anyone you know is looking for a mortgage or a re-mortgage, I’m here to help.  You can contact Four Oaks Financial Services on 0121 323 2070, or come direct to me at nickhepburn@fouroaksfs.com