Mortgages for Buying a House

General Information - So where is the catch? - Estate Agents 

Best Fixed Rate, Tracker and Discount Rate Mortgages for First Time Buyers

OK so you're buying that first home or even making the move to a new family home - what do you need to know? Well the good news is with the right advice it need not be as daunting as it may first appear. 

Unless you are lucky enough to have a bank balance sufficient to buy your new property outright, chances are you will need a mortgage. Which means finding a mortgage lender happy to lend you enough money to buy your new property. It may seem like a minefield, but Mortgage Lenders are quite predicable.

Mortgage Lenders make their decision as to whether you are a suitable person to lend money to based on the following factors. 

  • Your Occupation
  • Your Employment status e.g. full time/contract worker/self employed
  • Your income
  • The amount of other debt you may have
  • Your credit history (have you missed any payments or had other credit problems).
  • The size of your deposit
  • The term over which you want to borrow the money
  • The type of property you are looking to buy
  • What you intend to do with the property e.g. live in it or let it out 

Every mortgage lender has it own set of rules it applies when assessing an application, these are referred to as lending criteria. Your Independent Mortgage Adviser will have access to the lending criteria and underwriting guides for virtually all lenders.  Independent Mortgage Advisers have the ability to not only make recommendation based on the charges, rates and features of a mortgage, but also on the chances of a successful application.

Back to start of page

House Purchase Mortgages, so where is the catch? 

It is important to understand the mindset with which mortgage lenders operate. All decisions and rates are based on the risk the bank feels it is taking in lending its money, coupled with its responsibility under the various Financial Services Acts to lend responsibly.  In addition, when assessing risks lenders have a tendency to look at worst case scenarios, which in the case of a mortgage is repossession. 

What this means to anyone applying for a mortgage is that the lower the risk you represent the wider choice of lender you will have and the lower the interest rate you will pay. For example, a person with a 10% deposit is most likely to find the mortgage products they are looking at to be more expensive than someone with a 15%,25% or 40% deposit. The lender's logic is that should it have to repossess the property and house prices have fallen, it is more likely to get back less than it loaned from a person who put down a 10% deposit than someone with a higher deposit. One of the casualties of the credit crunch has been the 100% and 95% mortgage products being lost from the market.

The main reason lenders use income multiples, budget planners and more commonly affordability software is to meet their legal and regulatory obligations to lend responsibly.  Unless a lender can suitably demonstrate it checked an applicant could afford the mortgage being granted, it runs the risk of both being in breach of its regulatory responsibilities and could potentially loose the right to repossess should the mortgage holder get into payment difficulties. 

Back to start of page

Remember Estate Agents are not there to help you. 

It is often said that the customer is always right. When you are buying a house and you are dealing with an Estate Agent - YOU ARE NOT THEIR CUSTOMER! The person selling the property is ultimately the individual writing the cheque for the agent's fees and it is therefore there that the Estate Agent's loyalities lie.

Avoid obtaining your mortgage from the Estate Agent.  

This leads on from the tip above. In buying a house there should always be a certain degree of negotiation. The key to good negotiation is for the other party not to know how far you can or will go (so your best poker face is required). Get your mortgage from the Estate Agent or someone recommended by them and you are effectively putting your cards on the table.  The Estate Agent, is paid by and works for the person you are trying to agree a price with. In using the agent's advisor, the seller effectively gets to know how much you can get as a mortgage. Commonly Estate Agents will either try to force you to use their adviser, or get you to show your hand under the guise of having to vet your viability as a purchaser - don't let them. A good Independent Mortgage Broker will know how to deal with the agents for you so as not to undermine your negotiations. 

If you or members of your family are considering purchasing a property, please feel free to contact us to talk with an Independent Financial Adviser and Mortgage Broker. We are able to provide home appointments across the whole of West Sussex - Brighton, Hove, Haywards Heath & Crawley, East Sussex, Surrey - Croydon Sutton, Reigate, Redhill,  South London - Wimbledon, Fulham, Chelsea and Hammersmith and Central London.

Back to start of page

"Your home may be repossessed if you do not keep up repayments on your mortgage."