Top 5 Tips for Getting Your First Mortgage

As a first-time buyer, obtaining your first mortgage is both daunting and exciting in equal measures. Here are five tips to help you succeed.

1.       Save, save, save 

If you only do one thing before you try to get your first mortgage, save up as much as you can for a decent deposit. It is usual to pay a deposit of between 10% and 15% of the total mortgage. If you are able to save more than that you may be viewed as ‘low-risk’ by lenders and offered a better deal with lower interest rates and fees.

2.       Check your credit rating 

A high credit score is an important part of obtaining a mortgage, as lenders always check your credit report before offering any type of borrowing. You will be at an advantage if you have two or three credit cards that you have used responsibly and to which you have made regular payments on time. Lenders also use the electoral register to verify identity, so it will speed up this process if you are on the electoral roll.

3.       Knowledge is power 

Carry out lots of in-depth research about different types of mortgage and other house-buying costs, such as solicitors’ fees, mortgage set-up fees and Stamp Duty. This will allow you to make an educated decision about which mortgage is the most suitable for your circumstances. If you decide to take out a variable rate mortgage, your budget should include a financial buffer to cover any increase in interest rates.

4.       Be realistic

Do not get too carried away with the idea of your ‘dream home.’ You need to be realistic about exactly how much you can afford to repay each month and not be rushed into buying a property that will leave you over-stretched financially. Paying for a smaller property in the area that you like, or a larger house in a less desirable area is more sustainable than taking on a huge mortgage. You do not want to be stressed by monthly payments that you can only just meet, as it will take away the joy of owning your first home.

5.       Think long-term

Mortgage interest rates are extremely low at the moment, so it is a good time to buy a property if you are able to save for a deposit. However, interest rates will go up again at some point, so it may be worth considering a five or ten year fixed rate mortgage. You will be able to budget effectively and there will be no nasty surprises if rates rise rapidly in the future.

If you are aware of lenders’ requirements before you approach them for a mortgage, you will be at an advantage. Keep checking the mortgage rates and be prepared to act quickly if you are in a position to move forward, as deals can be withdrawn at short notice. If you plan carefully, obtaining your first mortgage can be an exciting process that will result in owning your first major asset and that puts you on the ladder to financial independence.

This post was written on behalf of Hughes Carlisle – They look to publicise information on a number of topical subjects which helps to drive debate.

7 thoughts on “Top 5 Tips for Getting Your First Mortgage

  1. Excellent tips! It is pretty important to think on the interest rates of the present as well as of the future. And we better think about our spending power before going for that dream home. If we cannot afford the mortgage on it, then it’s better left for some other time. Dreams after all, should be achieved with proper planning rather than jumping on them and paying for our hasty decision later.

  2. When buying a property, many things have to be taken into consideration because then it becomes easy for us to be ready for any issues that might spring up later. You have provided with really great tips in your post when mortgaging. They were very helpful, thanks a lot.

  3. The terms and conditions of different vendors differ. So it’s better to take a quick look before taking the plunge. And house prices will keep rising exponentially for a few more years. So we might not hesitate in going for that second home too. Thanks for sharing the financial aspects of the first home.

  4. Buying a house without enough planning can prove to be dangerous. There are certain mortgage ethics which need to be followed. You’ve detailed the points well. Knowing enough about the terms and conditions before paying the initial amount might result in problems later.

  5. Often when deciding to buy a home, you rush into decisions without taking the time to think about what you are doing. You must always have a financial advisor, be it a professional or a family or friend who has experience in such matters. They can give you the right advice not only in selecting the best home for you but also in making sure that you don’t bungle up on the financial aspects especially the mortgage.

  6. We do indeed tend to jump the gun in most of our daily decisions. This habit might harshly affect our house buying process. A thorough research on the many available houses needs to be conducted, comparing rates, area, and the ones you stated needs to be taken into account before going for that dream home.

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