AD | Collaborative post
In April 2014 John and I were able to buy our first house together. In fact, we’re still in that house now 7 years later and don’t plan on moving again for the next few years at least. When I look back to when we were planning on going from being in a small rented flat to dreaming of owning our own home it all seemed a bit impossible. We had no idea what we were doing and could have really done with someone explaining a few things to us. I wanted to share some of the thing that I wish I’d known before we got a mortgage.
Save, save, save
It’s no secret that you need a pretty hefty deposit before you can even think about buying a house but that amount will vary depending on where you live and where you plan to buy. We were very lucky as we received money as wedding presents and a bit of help towards our deposit or we would have been waiting a lot longer to get on the property ladder. We were also able to buy with only a 5% deposit as first time buyers and this really reduced the amount we needed for a deposit.
When you think about the money you need to save don’t just think about the deposit amount, which is where a lot of people might go wrong. Research what goes into buying a mortgage and what you might need to do along the way. John and I didn’t do any of this and was shocked when it came to things like searches, stamp duty, legal fees etc. All of these things add on to the amount you need to pay upfront and it can be a lot of money to find if you haven’t saved it already.
You don’t have to do it on your own
If, like us, you really didn’t know where to start or didn’t know much about mortgages then there are people who can help. A mortgage advisor and broker can help break anything down for you and explain the whole process to you in ways that you will understand. They can also help you to secure a mortgage deal, saving you a lot of stress and hard work… and confusion! By using a mortgage advisor and broker, you can make the mortgage process much easier and also much more enjoyable as you’ll have someone to do a lot of the hard work for you.
Although we were happy at the time to buy with a 5% deposit, instead of the usual 10% and above, it didn’t make things easier for us. While we ended up with a lower deposit amount this also meant that our LTV (loan to value) was higher and we didn’t get a great interest rate on our initial deal. We spent that first mortgage term paying quite a high amount every month and it was tough. Be prepared to weigh up the pros and cons of a low deposit and what you might end up paying out in the long run.
Thinking way ahead, be sure to do a credit check for yourself before applying for a mortgage. Things like missed or late payments can make a big difference to lenders and they will look at your credit history. By doing this early you have time to fix any issues or work on your credit score if it could do with some help.
Lastly, it’s really important to be realistic with your mortgage. You might get approved for a higher amount but this also comes with higher mortgage payments. Be realistic about how much you can afford to pay each month and bare that in mind when you’re looking at houses. There’s no point in looking at something 30k above your budget if you can’t afford the mortgage payments for somewhere like that. If you do decide to go with a mortgage advisor and broker, this is something you can let them know in advance.