Mortgage Advice for First Time Buyers

[Lickable 10]

An estate agent will be getting commission, as will the mortgage advisor!

 

Its a pretty nice payment to the estate agent, when a sale goes through with their help...

[Skatiechik 10]

Originally posted by Lickable

Except you dont know how much u can lend...

 

You don't need to decide on your mortagage company and apply to them to decide how much you will be allowed to borrow.

 

A rough guide is 2.5 times your salary. Most independant advisors will let you know that anyway. Whom it is normally customary to see when looking to purchase a house. Most estate agents will offer this service.

 

When you find out the amount you can roughly borrow there is no need to jump straight in and apply for a mortagage before you actually find a house and get an offer accepted on it.

 

What happens in 3 months time and you haven't found a house? You need to reapply again. Sounds like a waste of time to me. Just find the house first.

 

Skatie

[Lickable 10]

This convo is turning 'Springer'

 

You could get a DIP, to let you know how much you are likley to get!

 

We went to see two mortgage advisors, both of which said we could borrow 10k more that we were actually allowed! As you may guess, we were highly dissapointed to find that we couldnt afford a house in the area we were previously looking!

 

At the end of the day... I think its up to the individual to hear everyones views, and then to make there own

 

 

Things to remember...

 

1) Too many credit checks, i.e mortgage quotes, will result in bad credit, or pointless charges to have it done again.

 

2) Work out what the mortgage you are taking would be at 7% or more, which its expected to rise too... Its already rising to 4% today!

 

3) 'Up and coming areas' are not garunteed. A new area was recently built in sheffied, cant remember where, claining to be a new 'up and coming area' and is now have a sewage works being built at the back of it

 

4) Mortgage advisors get various rates from various lenders. Make sure they are not trying to give you a mortgage they benifit from.

 

 

Happy house hunting!

[scatterheart 10]

Anybody know anyone willing to lend to students

 

Didn't think so

 

Everyone we know with a mortgage pays less a month than we pay rent, so we'd have no problem with the repayments, it's the deposit we haven't got

 

The way prices are rising, by the time we've finished uni (doing masters then phd so long time to go yet) cardboard boxes are going to be 200k plus

[t020 11]

Originally posted by sarah_81

Everyone we know with a mortgage pays less a month than we pay rent, so we'd have no problem with the repayments, it's the deposit we haven't got

 

Bear in mind interest rates are on the up now, so monthly mortgage repayments will also go up.

[John 11]

Originally posted by Skatiechik

You may be able to afford the mortagage now, but if the interest rate rose by 5% in a period of a year would you be able to afford it?

 

Interest rate will not rise by 5% in one year. You will have more than half of UK not able to afford it. I think you mean to 5%.

 

Originally posted by Lickable

1) Too many credit checks, i.e mortgage quotes, will result in bad credit, or pointless charges to have it done again.

 

That is so true - shopping around for the best deal will probably get progressively worst if you do it too much. When they do a credit check on you over and over again, they think you were rejected by the last bank for some reason and your ratings goes go down instead of thinking you are in fact shopping around to getting a good deal. As a result banks think they are taking a risk and therefore charge you more.

[beck 10]

Some of the replies to your question have highlighted that there's a lot of good and bad advice out there.

 

I have recently helped quite a few first time buyers get mortgages when they moved to Sheffield with their jobs. each one ended up with a different 'product' because everyone is different in their attitude and circumstances.

 

Its important you choose a mortgage advisor who listens to what is important to you and asks you a lot of questions before they start suggesting anything.

 

Find someone you feel comfortable with and who is on your wavelength not just a great salesperson with the gift of the gab.

Ask all the questions you want - if anyone makes you feel as if you're being stupid - go to someone else.

 

There are sharks about - but most of us are normal decent people who actually care about getting it right!

 

Good luck!

[t020 11]

Originally posted by beck

Find someone you feel comfortable with and who is on your wavelength not just a great salesperson with the gift of the gab.

 

Someone with the 'gift of the gab' would put me off anyway. If I walk into a shop for example, to be greeted by some over enthusiastic, commission hungry sales assistant, the first thing I do is turn around and leave (after saying thanks but no thanks, of course).

 

 

Originally posted by beck

There are sharks about - but most of us are normal decent people who actually care about getting it right!

 

Especially where theres commission involved, ay?

[Skatiechik 10]

Originally posted by John

That is so true - shopping around for the best deal will probably get progressively worst if you do it too much. When they do a credit check on you over and over again, they think you were rejected by the last bank for some reason and your ratings goes go down instead of thinking you are in fact shopping around to getting a good deal. As a result banks think they are taking a risk and therefore charge you more.

 

Something I am not quite getting, why do you need to go through a credit check when shopping around for the best mortgage. Just read what mortagage deal a bank/building society is offering?

 

I would have thought it was plain simple to read what the deal was, and if it would suit you.

 

Speak to a mortgage advisor, find out how much you would be allowed to borrow from a bank/building society. So you know you will be able to obtain a mortgage in principle. This is all the estate agents needs to know before accepting your offer on a house.

 

Once your offer has been accepted then do your on research into which mortgage is for you. Don't rely on Mortgage advisors, as the deal we went for the advisor didn't even know it existed. The web can be a very useful resource for this.

 

As with all first time buyers, (myself included at the time) knowledge of mortgages is limited. But it is worth learning and understanding them to be able to get the best deal rather than relying on someone else to find it for you.

[Tony Ruscoe 10]

Originally posted by Skatiechik

Something I am not quite getting, why do you need to go through a credit check when shopping around for the best mortgage.

 

...

 

Speak to a mortgage advisor, find out how much you would be allowed to borrow from a bank/building society.

 

You just answered your own question.

 

In order to find out how much they can lend you, they have to do a credit check.

[Skatiechik 10]

Infact I didn't. The point I am getting at is

 

If you go through one credit check, and they tell you that you can borrow such and such. Therefore you have obtained a mortgage in principal.

 

What John and Lickable were suggesting is that you have to go through a credit check everytime you look at a deal whilst browsing for the best mortgage, which isn't correct.

 

If you have obtained a mortgage in principal there is no need to worry about rushing into a deal before you find the house of your dreams.

 

The estate agent now knows you are a credible prospective buyer. So there is no need to obtain a mortgage untill after your offer has been accepted on a house.

[John 11]

It work like this.

 

You go into Halifax and ask how much a mortgage for 80K is over 25 years is.

 

They ask for your details go away and phone the credit check people up for your ratings and history of debt and come back and give you the answer you seek.

 

You've got your information but you feel it is too much and you think you can get a better offer elsewhere, so you leave and go into HSBC instead and ask how much a mortgage is for 80K is over 25 years.

 

The procedure is the same but each time a credit check is made your rating is going down because they think Halifax rejected your application for some reason.

 

So shopping around may not be in your best interest after a certain point because the lower the rating the higher the risk you are deemed to be and therefore it cost more to have a mortgage.

 

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