First Time Buyer - Mortgage information
Purchasing a house for the first time is a huge step for anyone, especially in today's uncertain climate. Not only do you have to find the right house for you but you also have to find the right mortgage for you. But there are so many different types of mortgages available! The following provides information on the various mortgage types available for first time buyers, the various costs involved and any further insurance or extras that can provide the peace of mind to help you to sleep at night... in your new house, hopefully!
- Tracker Mortgages - tracks rates from the bank of England base rate. Also known as a variable rate mortgage. This means that the interest rates of the mortgage can vary. Tracker mortgages can be across a specific time period or they can be applied to the entire length of the mortgage.
- Fixed Rate Mortgages - These mortgages hold the same interest rate throughout the entire duration of the mortgage, which is completely the opposite of the tracker mortgage.
- Capped Rate Mortgages - These mortgages are very similar to fixed rate mortgages, but they do have one difference. That being, if the mortgage lender's variable drops lower than the capped rate, then the rate you have been provided with will drop to fall in line with the lender's drop.
- Discount Variable Rate Mortgages - These mortgages have an interest rate where a discount is applied to the lender on their standard variable rate, over a specific time period. As the rate for the lender rises and falls, the discounted rate also rises and falls by the same quantity. These mortgages are often only provided for a small period, which is often two years.
- Offset Mortgages - This mortgage puts all of your finances into a single account. It calculates all of the values together and works out the total amount of debt left by you. It then works out the interest rate based on that final calculation, rather than providing differing interest rates for each of your finances.
- Self Certification Mortgages - This mortgage allows people who are self employed or working as contractors to gain a mortgage as they do not need to prove their earnings. These mortgages are usually capped at 75% of the property value and the rates charged are usually higher than standard mortgage types.
- Graduate Mortgages - These mortgages allow people to move into a home straight after university by providing up to 102% mortgages. However, currently no 100% mortgages are being provided in the UK.
Costs involved in buying a property
- Stamp Duty
- Legal Fees
- Land Registry
- Mortgage Indemnity Guarantee
- Lender's Valuation
- Survey Fee
- Buildings Insurance
- Removal Firms
Other things you may wish to consider include
- Life Insurance
- Home Insurance
- Mortgage payment protection
These things are there for you to purchase so that you can gain a certain level of calm and you can enjoy your new life, in your new home.
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