Mortgage Guide
Mortgage Guide: Buying a home There are lots of things to plan for when buying a home. Some you may already have thought of, such as a deposit, and others you may not, such as protecting your income, how much buildings and contents insurance will cost for your new property and would their be any additional travel expenses to your place of employment if you moved home. What type of mortgage do you require.
Taking out a mortgage is probably the biggest financial undertaking you will ever make. Naturally, you will want to know which mortgage is the best one. Happily, there is plenty of choice in the UK mortgage market, but with 2,000+ deals on offer, identifying which mortgage is best for you can be difficult.
You need to decide which option is best for you. Your mortgage broker should help give you mortgage advice on which is best for you in your situation.
Mortgage Guides
Mortgage Guides: Before you buy Plan your savings and work out your budget so that you know how much you can afford. Managing your money helps you work out where your money is going and how much you can save towards buying your home. It can also help you see where you may be able to cut back. You never want to stretch your budget to far to purchase your property in case you encounter financial difficulties in the future and remember you still have to enjoy the other things in life such as new car or holidays.
Manage your debts If you've got money to spare, it makes sense to pay off any loans or credit cards first. This is because the interest you pay to borrow is usually higher than the interest you get on savings accounts. Make this a priority as you could be paying up to 20% interest on your credit cards and almost the same on any unsecured loans you have. Remember also that lenders take into account your existing borrowings when determining the level of mortgage they are prepared to lend so by reducing them will help them in determining the amount they are prepared to lend you for mortgage purposes.
Using the repayment calculator will give you an indication of your repayment mortgage monthly payments to see if you can afford them.
Best Mortgage Guide
A mortgage is a loan secured against your home, and if you can’t repay it, the lender can sell your home to get its money back. There are two types of mortgages (repayment and interest-only) but mortgages have different features and different interest-rate deals, so check our mortgage advice which gives you brief details on what to expect in the mortgage market and gives you an insight into the mortgage types available in the market today or check our mortgage type page for further information on the products. how much you can borrow depends on your personal circumstances, such as your income, your outgoings and whether you’re buying alone or with someone else enter your details into our mortgage quote facility and this will help determine your borrowing capacity.
You can use our mortgage calculator to work out what your repayments are likely to be now and also in the future if interest rates rise. Make sure you can afford the repayments by using our mortgage calculator planner. Don’t be tempted to overstretch yourself. Interest rates are at a record low and won’t stay low forever and your circumstances may change, so protect yourself against these risks it is also very important to get a quote at this stage to protect your income so you can add it as part of your mortgage payment as you do not wish to run the risk of losing your property in the event of sickness, accident or unemployment.
If you choose the interest only option you will need to check that your investment or savings plan grows accordingly, so that at the end of the term you'll have enough money to pay off the loan. If it doesn't grow as planned, you will have a shortfall and you'll need to think about ways of making this up. You should receive a statement from your savings plan at least once per year and you should review this with your mortgage needs each year, it would be beneficial to discuss this with your mortgage advisor so he knows how much your savings are currently worth and can document this and discuss it with the mortgage provider if required. You should also consider if you have a shortfall with your savings plan if this is the way in which you wish to continue with your mortgage, or would you rather be on a repayment mortgage. Things you may consider at this point are if you en cashed your savings what penalties would you encounter, how much would you be able to reduce the mortgage by and what would be your new mortgage payment on a repayment mortgage if you did this.
Mortgage Guide Costs
Stamp duty is a government tax that you pay when buying a home above a set amount. The amount is a percentage of the value of the property. If you're a first-time buyer, you don’t have to pay stamp duty on a home under £250,000.
If you’re buying or selling a property, you’ll also have to pay legal fees and if selling a current property then you will also have to pay estate agents fees unless you sell the property by yourself.
If you can’t work because of an accident, illness or redundancy, your lender will still expect you to continue paying your mortgage. There are a number of products you can buy to help with your repayments, but check out when they pay out and how long for. Buildings insurance, most people need buildings insurance to cover their home in case the building is damaged or destroyed. You don’t have to buy it from your lender, so shop around to get the best deal for you visit our comparison page to get you the best quote available.
Mortgage Guide Other Considerations
Make sure you change your address with your bank, credit-card and insurance companies, as well as other financial companies that you have arrangements with. It might be a good idea to put a three-month redirection on your old address to cover the transition period. This can also reduce your risk of identity fraud. Contact your local post office to have your mail redirected which incurs a small fee but is worth while because it ensures you get your mail.
Don't be tempted to keep or throw away mail addressed to a previous tenant/owner. Always return it to the sender if you don’t know their new address. You don't need a stamp – just mark it 'return to sender' and stick it in a post box. This should avoid you having to deal with any problems if they weren't up to date with their payments. This may also help you as if the previous occupier had bad credit then by returning the mail to the sender will alarm them to the change and you should also post a letter to the return sender address asking them to update their records so it does not have any impact on your credit rating. Include your entry date in the letter the mortgage provider you have your mortgage with although do not disclose any mortgage account numbers and the solicitor who completed the transaction on your behalf so the company is left in no doubt that the previous occupier has left and hopefully this will result in them updating their records.
Your new address may have an impact on your credit score if previous occupiers have had bad credit. You can check your credit record at your new address using credit reference agencies. You can then ask the agency to change the information on your file if it is incorrect, or it includes details about people who have no financial connection with you. We would encourage you to do this as a priority as the longer you leave it then the previous occupiers creditors may start to question why you have taken so long to do so.
Mortgage Guides
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The guidance and/or advice contained within this website is subject to the UK regulatory regime and is targeted to UK consumers.
Money and Me is a marketing company and we pass enquiries to the brokers who are authorized and
regulated by the Financial Services Authority for the purpose of arranging Mortgages and Insurance Products.
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