First time buyer? Baffled by mortgages?

As a first time buyer beginning your search for a mortgage, you may find searching the market a challenge. There’s a lot to consider and understand, if you are to get yourself the very best deal on offer to buy a home.

Buying a home is a stressful process and any professional help you can get, will make buying a house that much easier.

At Deal Direct we are used to finding first time buyers’ mortgages. With our experience in this sector we know just what help you are likely to need the most.

For a start just understanding the terms that are used can be a big help.

Help working out what things mean.

• What’s an agreement in principle? 

This is something you find out prior to searching for a home. Based on your circumstances, a lender will work out exactly how much money they will allow you to borrow. Their provisional offer is subject to a satisfactory surveyors report and valuation. Note: offers in principal can be withdrawn and so there are no guarantees.

• What does loan-to-value (LTV) mean?

This is the proportion of the property value you wish to borrow. The higher the mortgage loan to value, the larger you will need your mortgage advance to be. Note: high LTV mortgages with smaller deposits, attract far higher fees.

• What’s a discount mortgage?

With a discount mortgage you are offered a reduction on the lender’s interest rate for a period of time. This means for an agreed time your repayments can remain low. It’s important not to get sucked into believing discount mortgages will automatically offer you a better deal. Note: it’s vital to compare all the deals you are interested in on a ‘like for like’ basis, to ensure you end up with the one that is most competitive overall.

• What’s an early repayment charge (ERC)? 

This is when you repay your mortgage before the time you agreed when you accepted your deal. So for example, if you took out a 5 year deal and want to repay or remortgage and switch to a better rate, before the 5 years is up, you will pay a penalty if an ERC applies. Note: it’s essential you review any offer carefully to find out if any early repayment clause applies.

If you would like to search for a first time mortgage call us at Deal Direct.

We are here to offer you impartial advice and a ‘whole of market’ search. We are dedicated to helping first time buyers get the best deal possible, to make their home-ownership more affordable.

Call for first time buyer mortgage advice on 0800 048 8828.