Advice on securing first mortgage for 1st time buyer

22
Found 24th Jul
Hi everyone

I am looking to purchase a studio flat that is currently on the market for £70,000. Would like some advice on what the best types if mortgages are, how to get accepted etc. Also anything else I'll need to know...

Thanks

Becca
Community Updates
Ask
22 Comments
I always go for the fee free mortgages - there are plenty of good two year fixed rate deals with a low interest rate, you may even find a decent five year fixed deal.

I wouldn't recommend a mortgage broker - they add their fees on to the mortgage and you can usually find as good a deal looking yourself.

Building societies usually have better deals but not always, First direct and HSBC have a pretty good reputation, although when I've looked they all see to have huge fees attached.

It's a slow process unless you have a really good solicitor, even then it depends on the sellers solicitor.
The higher the deposit, the better the rate you are likely to get. Also, before you start looking, check out your credit score. A few months building that up if it is low, could make a vast difference to your acceptability. When you do move in, don't buy all new furniture. Every family has a vast supply of hand me downs. Spend your money on solicitors fees, raising a bigger deposit etc. You can slum it on hand me downs for a year or two whilst you get on your feet.
A decent deposit will get you a decent deal but £10k or above should suffice here. A 2 year fix would be a good place to start. Just use the comparison sites to get an idea of what mortgages are on offer and look at the overall cost (including arrangement fees where applicable). I have used the Nationwide and they have always been competitive. You don't need to go to a mortgage broker for a small mortgage like that, they say they work for "free" but the bank pays them their commission which they will in turn recoup from you. Brokers/advisors will have half an eye on their commission when offering you a deal put it that way.

As for the apartment the two main things to check are the length of lease remaining and service/insurance charges as they can be quite high if it's in a "posh" building with extra facilities and landscaping to maintain. Its usually payable twice per year along with ground rent. Your solicitor will be able to advise you here. I don't think you will have to pay stamp duty at that price but set aside £1-2k so for fees. Good luck
Edited by: "tallpete33" 24th Jul
If you’re buying for the first time, go and see an independent mortgage broker. They will be able to talk you though it and various types of deals - you don’t have to take any of them but the chat alone could help you out massively in understanding it all.
Go and see as many brokers as you can, get an appointment with it’s your own banks advisor and use the many comparison websites - the more info you can get, the better position you put yourself in. Don’t limit yourself.
Once you know roughly how it all works and the different rates / payments etc, you can make an informed decision as which one to go for, just make sure you’re not stretching yourself too much as rates can go up, have a bit of leeway.
psychobitchfromhell54 m ago

The higher the deposit, the better the rate you are likely to get. Also, …The higher the deposit, the better the rate you are likely to get. Also, before you start looking, check out your credit score. A few months building that up if it is low, could make a vast difference to your acceptability. When you do move in, don't buy all new furniture. Every family has a vast supply of hand me downs. Spend your money on solicitors fees, raising a bigger deposit etc. You can slum it on hand me downs for a year or two whilst you get on your feet.



I know where you are coming from , Orange boxes (do they still have them in wood ?) made great bedside cabinets and small cupboards - a few sheets of MDF perched on bricks made a nice lounge unit etc ,etc .

Save for the deposit , get the flat and DONT instantly turn to credit to make it super nice , that will come over the years . No good having a super flat with the priciest furniture when you can't afford to get out at least occasionally to enjoy life .
Bigfootpete1 h, 20 m ago

I always go for the fee free mortgages - there are plenty of good two year …I always go for the fee free mortgages - there are plenty of good two year fixed rate deals with a low interest rate, you may even find a decent five year fixed deal.I wouldn't recommend a mortgage broker - they add their fees on to the mortgage and you can usually find as good a deal looking yourself.Building societies usually have better deals but not always, First direct and HSBC have a pretty good reputation, although when I've looked they all see to have huge fees attached.It's a slow process unless you have a really good solicitor, even then it depends on the sellers solicitor.


not true.
ask the bank to calculate the total cost of mortgage. our was either 1000 quid at 2.39 fixed and free at 2.42 (or something like that) fixed. the difference was something like £400 after 2 years. it will all depend how long the offer is for and what works out best.

back to the topic.
1. good rates start at 10% deposit, ask family to "gift" you some money to get to that amount if you are short
2. only buy freehold however since you buying a flat this is unlikely to be the case. check number of years on the lease (minimum 50 + length of your mortgage). Check service charges and what is included
3. I would personally avoid help to buy and other schemes of this type. you basically have to pay the mortgage and save extra to repay significant lump sum after 3 or 5 years
4. can you not find a larger property for similar money (even if you have to gradually do it up). think about the future and resale value
4.1 haggle. depending on the state of the property and how long its been on the market. I would say 10% should not be a too cheeky offer our property was 165000, got it down to 158k with initial offer at 152, we believe we have really underpaid as all properties around are at 180k+ mark . Although the vendors were apparently literally dying.
5. it will take good 3 to 6 months before exchange. if you are renting dont give your notice just yet (speak to the landlord about possible early termination etc)
6. a month before moving out pack bigger/bulkier items and put them in self storage when it comes to moving out and cleaning up after yourself it will be much easier
Edited by: "mattsk" 24th Jul
mattsk33 m ago

not true.ask the bank to calculate the total cost of mortgage. our was …not true.ask the bank to calculate the total cost of mortgage. our was either 1000 quid at 2.39 fixed and free at 2.42 (or something like that) fixed. the difference was something like £400 after 2 years. it will all depend how long the offer is for and what works out best.back to the topic.1. good rates start at 10% deposit, ask family to "gift" you some money to get to that amount if you are short2. only buy freehold however since you buying a flat this is unlikely to be the case. check number of years on the lease (minimum 50 + length of your mortgage). Check service charges and what is included3. I would personally avoid help to buy and other schemes of this type. you basically have to pay the mortgage and save extra to repay significant lump sum after 3 or 5 years4. can you not find a larger property for similar money (even if you have to gradually do it up). think about the future and resale value4.1 haggle. depending on the state of the property and how long its been on the market. I would say 10% should not be a too cheeky offer our property was 165000, got it down to 158k with initial offer at 152, we believe we have really underpaid as all properties around are at 180k+ mark . Although the vendors were apparently literally dying.5. it will take good 3 to 6 months before exchange. if you are renting dont give your notice just yet (speak to the landlord about possible early termination etc)6. a month before moving out pack bigger/bulkier items and put them in self storage when it comes to moving out and cleaning up after yourself it will be much easier


So you are saying a £1000 fee is better than the £400 difference in rates....
If you're buying a flat then make sure you know the details.

If its a converted house then you'll probably get a share of the freehold and the leasehold of the flat. If a newer build in a block then you are more likelt to just get the leasehold. What are the arrangements for lease extension?

Check the annual fee for management charges / maintenance. Any large costs llikely in the future - think cladding/sprinkler system install as well as general building stuff.

What are the terms of car parking if any?

Mortgage wise a good advisor is worth the cost if there are any complexities. Interest rates seem likely to go up so a long fix is a good plan (regardless it gives you certainty with budgeting).
If you expect to have more money available in the future then check the t&c for repayment rules. Sometimes it costs you to overpay.
Bigfootpete3 m ago

So you are saying a £1000 fee is better than the £400 difference in r …So you are saying a £1000 fee is better than the £400 difference in rates....


No at 2 years the difference would be 400, if taken for longer eg 5years fixed the fee based mortgage would work out cheaper
Put as much deposit down as you can !! Simply because you or knowbody on this site nor powers that be can predict the next down turn in the market an if you cut it fine with your LTV you’ll be saving again for another deposit if you need to move on! Spend wisely!
rogparki2 h, 39 m ago

I know where you are coming from , Orange boxes (do they still have them …I know where you are coming from , Orange boxes (do they still have them in wood ?) made great bedside cabinets and small cupboards - a few sheets of MDF perched on bricks made a nice lounge unit etc ,etc . Save for the deposit , get the flat and DONT instantly turn to credit to make it super nice , that will come over the years . No good having a super flat with the priciest furniture when you can't afford to get out at least occasionally to enjoy life .


I'm still using the book cases my parents bought when they got married. Yesterday my sister sold a Lloyd loom chair on Facebook that someone gave her second hand when she first set up home. She's a granny now
Lay off any unnecessary big spends and reduce your out goings for 3 months or so before as they'll use your bank statements for the affordability checks.
Save as much as you can for the deposit. Higher the deposit the lower the rate and the lower the total loan amount.

In terms of which provider it's going to depend on how long you want to fix it for, if you want to overpay, how much you have budgeted for the initial costs and how much your borrowing.
I'm with Nationwide due to their overpayment terms, 5 year fixed rate, cashback and no fees.
I can overpay 10% of the original loan amount per year which means in theory I could clear over 60% of the loan before fixed term ends.
The closest any other mortgage provider is 10% of the remaining amount which makes a big difference a year or two down the line.
I'm with Nationwide as well, they were the best for me earlier this year with a 25% deposit and a friend with 10% although they got a worse rate, fee free and £500 cashback. Whether fee free is good or not depends in the amount and length, for me I was better off going fee free and then paying that amount as an early repayment (which I've not actually done yet).

I saw a couple of mortgage advisors, some paid for (I declined after our initial discussions) and some free in estate agents, none could beat the deals I'd found myself on comparison sites, some tried to make excuses, some held their hands up and said they recommend I do it myself as they can't do more than I'd done already. I know people who have used them and it seemed a lot of hassle, mistakes on applications, delays etc and hefty fees. I don't think I spent more than an hour doing the application and a few hours on my actual research.
Edited by: "dcx_badass" 24th Jul
dcx_badass1 h, 4 m ago

I'm with Nationwide as well, they were the best for me earlier this year …I'm with Nationwide as well, they were the best for me earlier this year with a 25% deposit and a friend with 10% although they got a worse rate, fee free and £500 cashback. Whether fee free is good or not depends in the amount and length, for me I was better off going fee free and then paying that amount as an early repayment (which I've not actually done yet).I saw a couple of mortgage advisors, some paid for (I declined after our initial discussions) and some free in estate agents, none could beat the deals I'd found myself on comparison sites, some tried to make excuses, some held their hands up and said they recommend I do it myself as they can't do more than I'd done already. I know people who have used them and it seemed a lot of hassle, mistakes on applications, delays etc and hefty fees. I don't think I spent more than an hour doing the application and a few hours on my actual research.



Very wise. Ultimately a mortgage is just a big loan and so it's very easy to see what you are paying up front. You don't need somebody else to spin you lines about "secret" mortgages or fill in the forms for you and then try and sell you over priced insurance and other products.
Have you checked how you can borrow yet? If not, hop over to your favourite bank and enter some details on their 'how much can I borrow' calculator to give you an idea of how much they will lend.

Use comparison websites to see what is available and/or use a fee free mortgage adviser like L&C. I've never used a mortgage adviser but they can get you products that you cannot apply for yourself. Decide which type of mortgages you would like from fixed, trackers, variables etc. I prefer fixed as that allows me to know how much I pay every month.
Over at MSE there are plenty of calculators moneysavingexpert.com/mor…ges that allow to you compare mortgages to help you decide.

Once you've chosen a product, apply for an agreement in principle which is like a promise from a bank that they will lend you that amount, this will allow you to put in an offer for that flat.

You may want to check the terms of overpayments as you may want to do that at some point. Most allow overpayments of 10% of the mortgage balance at the start of the year before fees apply.

Switch the product at the end of the introductory period otherwise you will revert to paying SVR which is a ridiculous rate and repeat.
If your new monthly cost of your new product is cheaper consider overpaying the difference every month to the level you were paying on the last product. My monthly payments are £46 lower than my original first time buyer mortgage, by overpaying that £46/month, the calculators say I should expect to pay off my mortgage 4 years earlier saving thousand in interest.

Good luck.
Edited by: "mug51" 24th Jul
mattsk10 h, 15 m ago

not true.ask the bank to calculate the total cost of mortgage. our was …not true.ask the bank to calculate the total cost of mortgage. our was either 1000 quid at 2.39 fixed and free at 2.42 (or something like that) fixed. the difference was something like £400 after 2 years. it will all depend how long the offer is for and what works out best.back to the topic.1. good rates start at 10% deposit, ask family to "gift" you some money to get to that amount if you are short2. only buy freehold however since you buying a flat this is unlikely to be the case. check number of years on the lease (minimum 50 + length of your mortgage). Check service charges and what is included3. I would personally avoid help to buy and other schemes of this type. you basically have to pay the mortgage and save extra to repay significant lump sum after 3 or 5 years4. can you not find a larger property for similar money (even if you have to gradually do it up). think about the future and resale value4.1 haggle. depending on the state of the property and how long its been on the market. I would say 10% should not be a too cheeky offer our property was 165000, got it down to 158k with initial offer at 152, we believe we have really underpaid as all properties around are at 180k+ mark . Although the vendors were apparently literally dying.5. it will take good 3 to 6 months before exchange. if you are renting dont give your notice just yet (speak to the landlord about possible early termination etc)6. a month before moving out pack bigger/bulkier items and put them in self storage when it comes to moving out and cleaning up after yourself it will be much easier



You've dismissed the advice given from bigfootpete, but your advice may be untrue and a costly lesson for the OP.

No fee or lower interest rate comes down to how long the OP is looking to stay in the property which decides which is better.

Which is an important decision the OP must ask themselves, do they foresee selling and upgrading in the short term, then go for a no fee, if there looking at staying put long-term then a lower interest 'may' be the better option.

Nothing more to add on the mortgage side that hasn't been answered by others.
I'd suggest the OP, as a first-time buyer, look closely at there life cover.

Most will opt for the lowest amount to keep premiums down, then renew the policy and increase the amount as you buy larger property(ies) over the years.

Taking out a larger policy now covers the eventuality of buying a larger property in the future and thus may well see a saving overall.

i.e. a £70k 25year life policy now, then renewing to say £140k cover in 5-10 years may well be more expensive than taking out a 25year £140k policy now, taking advantage of cheaper premiums whilst they have youth on there side..?

Each situation is different though, so no hard and fast rule, but certainly I'd have saved had I done this 20 years ago, no-one knows whats round the corner and what health condition they'll be in in years to come, thus affecting future new policies.
Edited by: "andynicol" 24th Jul
Thanks everyone for your comments I'm not looking to move on quickly..... I've got furniture from home... I'll use sites that give away free etc. The rest of the questions I'll look into & come back...
andynicol10 h, 58 m ago

I'd suggest the OP, as a first-time buyer, look closely at there life …I'd suggest the OP, as a first-time buyer, look closely at there life cover.Most will opt for the lowest amount to keep premiums down, then renew the policy and increase the amount as you buy larger property(ies) over the years.Taking out a larger policy now covers the eventuality of buying a larger property in the future and thus may well see a saving overall.i.e. a £70k 25year life policy now, then renewing to say £140k cover in 5-10 years may well be more expensive than taking out a 25year £140k policy now, taking advantage of cheaper premiums whilst they have youth on there side..?Each situation is different though, so no hard and fast rule, but certainly I'd have saved had I done this 20 years ago, no-one knows whats round the corner and what health condition they'll be in in years to come, thus affecting future new policies.


Or save a fortune and dont bother with life insurance. It's not compulsory and most single people dont need it
chocci2 h, 8 m ago

Or save a fortune and dont bother with life insurance. It's not compulsory …Or save a fortune and dont bother with life insurance. It's not compulsory and most single people dont need it



Of course, and don’t pay house insurance, boiler cover, lots of ways to save money, this is after all a money saving site, full of money saving ideas.

Some great ideas, some, like your own, downright ludicrous.

Only my opinion of course.
andynicol49 m ago

Of course, and don’t pay house insurance, boiler cover, lots of ways to s …Of course, and don’t pay house insurance, boiler cover, lots of ways to save money, this is after all a money saving site, full of money saving ideas.Some great ideas, some, like your own, downright ludicrous.Only my opinion of course.


Dont be stupid. Home insurance is vital. Boiler cover is not, just like life insurance on a £70k mortgage

You seem like one of these morons who thinks everything they write is correct but most of what I've seen you write is complete nonsense.
chocci2 h, 17 m ago

Dont be stupid. Home insurance is vital. Boiler cover is not, just like …Dont be stupid. Home insurance is vital. Boiler cover is not, just like life insurance on a £70k mortgageYou seem like one of these morons who thinks everything they write is correct but most of what I've seen you write is complete nonsense.



Each to there own and all that.

I’d be interested in what you refer to is complete nonsense though...
Post a comment
Avatar
@
    Text

    Top Discussions

    Top Discussions

    Top Merchants