Getting ready to buy your first house can be a tedious and tormenting process. Even more, tormenting is to prepare oneself for their first buyer mortgage. In the simplest form,a mortgage can be considered to be a loan. If you have any exiting loan, then you can easily apply for a further home loan or auto loan with your present credit history. But for the first buyer mortgage, it is quite difficult to convince the lenders because lenders cannot track your previous credit history. In this case, you can search such loansonline and choose some lenders who have simple loan process.
The amount saved up by one to deposit is very crucial when it comes to getting a mortgage because the higher the deposit, the lesser the debt. On top of that, a higher deposit gives access to better mortgage rates. One should also remember that there are a lot of other expenses when it comes to getting a mortgage like a mortgage arrangement fees, stamp duty,solicitor’s fee, etc.
First Buyer Mortgage
The first thing after applying for a mortgage a lender does is, check one’s annual income and all their transactions including previous loan debts, bills, grocery cost, healthcare etc. So apart from the papers of your property, you need to submit various papers to avail the mortgage loan, and you must compare the rate of interest and other charges of different lenders before applying for such loan.
After this the person’s credit score is checked, to make sure the person can be relied on as a borrower. Then the bank or the lender gives a mortgage according to their maximum loan-to-value (LTV) which is the maximum amount of loan one can take based on the percentage of the value of the property.
When Should One Apply For Mortgage?
Before applying for one’s first buyer mortgage it is advised that one should get an estimate or principle of a mortgage agreement from their sources. This makes one aware of the amount they can borrow.
Most lenders usually carry out a hard credit check that appears on the person’s credit file. So, it is suggested that if the mortgage provider does do a hard credit check and do not agree to fulfill your needs then you can search some online lenders to avail such loan with minimum documentation. Even banks can take lots of time to disburse the loan because they will check your credit score along with other documents. So if you need money on an emergency then you can search some first buyers mortgage loans online.
Types of Mortgages
1. Fixed Rate Mortgages:
Fixed rate mortgage loans can be taken for a period of 2, 3 or 5 years (in some cases till 10 years). It is advisable to switch mortgages after the deal is over because the rates are not competitive.
2. Adjustable Rate Mortgages:
In these types of rates, the rate changes from time to time.Sometimes these mortgages start at a fixed rate but change to an adjustable rate after a year or a certain initial period. Such loans are therefore also known as “hybrid” mortgages.
3. Offset Rates:
In these kinds of rates what happens is that if one has a savings account with the bank they are borrowing from, then the interest they gain from the savings is not given to them, instead,it is deducted from the interest on the mortgage they are supposed to pay.
One thing to keep in mind before going for the first buyer mortgage is to read all documentation related to the mortgage, very carefully.