Mortgage help!

13
Found 15th Dec 2017
Hey all, so I am planning on joining the property ladder soon (next year or so) and would like to do some research ahead of time.
So my current understanding of mortgages are bare to minimum, essentially is a loan but what I need help is all the jargon they use eg. Max LTV 60% and ERC's...
There are also different types of mortgages?
I would like to have a clear idea of what I am getting into before stepping into banks asking about mortgages, would someone please be so kind to explain everything to me in layman terms?
Thanks in advance!
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In short contact a mortgage broker who will take you through the whole process and find the best options for you from the marketplace
Found this easy beginners guide to mortgages on Moneyadviceservice
Don't get too caught up worrying about terminology, any mortgage or finance expert should explain things in plain English to you.
LTV = Loan to Value (% the lender is prepared to lend you against the 100% cost of the property with the difference being supplied by you as the deposit)
ERC = Early Redemption Charge (penalty charge made by the lender if you decide to pay off the mortgage early)
Edited by: "Toptrumpet" 15th Dec 2017
Good idea - always wise to plan ahead so that when you need to do something you are clued up on the subject. Your mortgage is likely to be your largest ever spend - so worth making sure where your money is going and what the best possible deal is.

Have a read of the moneysavingexpert website and watch the Martin Lewis TV shows - he gives a lot of useful information.

Although it is many years ago since I last arranged a mortgage I personally have never used a mortgage broker - always found it cheaper to get the best deal myself.

Also, if your first purchase is at least 12 months away consider starting (if not already done so) a Lifetime ISA with Skipton Building Society - you can get a 25% bonus up to £4k deposited each year towards your property deposit.
Good on you for trying to find out as much as possible, make sure you read all the small print about any fees.

If you use a mortgage broker then the fee is normally added to your mortgage.

I went with Nationwide as they are one of the few who didn't charge me a fee just to get the mortgage, HSBC seem to charge at least £1000 as an admin fee, usually more. But they and the sister company First Direct still seem to have a good reputation for mortgages.

P.s also check moneysavingexpert.com/mor…ges
Edited by: "Bigfootpete" 15th Dec 2017
Thanks for all the advice ! I knew i could i count on the hukd community.
Been reading up everything posted and feel a bit more comfortable now.
Now the hard bit of saving starts now haha
Buy the worst house in the best road. Never be afraid to walk away, the roads are full of houses. Look at the house, not the decorations or the appliances. Have a proper building survey if you can afford it. Don't use the same solicitor as your leander and don't trust the leader's survey to tell you what you need to know. Don't all for the "help to buy" the new houses are 30% more then they are worth. Do take a look at "right to buy resale" some bargains to be had if you are happy to own 75% but check the rent rate and the extras. Concider a fixed rate but with low fees.
I did have a fair knowledge on mortgages (worked for a law firm that had mortgage providers as clients) but I used a mortgage broker for my mortgage with natwest.
Don’t be put off by a mortgage fee necessarily - compare how much it costs you v a fee free one with a higher rate...often with the same lender the fee option is better as saves money in the long term
Jeff Maskell at Wiseone... give him a call he is amazing and does everything for you, finds you the best mortgage deal and then applies for you and sorts it all out with the mortgage company. He gets paid from whichever mortgage company you go with.

He found us a great deal with Nationwide on their Base mortgage rate which is amazing! Would highly reccomend him, he made everything so easy for me. Good Luck
Another good tip is to set you term as long as you can (first time buyers) and overpay if you can.

Say for example at 25 years it’ll cost you £1,000 a month but if you take it over 35 years it’s £800 but you pay £1,000 anyway, it still costs you the same amount of money. Difference is if you hit hard times you only have to find £800 instead of £1,000.

It’s worth talking to a financial/mortgage advisor.
Although I am clued up about financials, especially Mortgages, I went with a broker for the my first mortgage. This was because I didn't want to mess up the application and risk losing the house we'd got our eye on.

Note: No broker should try and charge you for the service!! One wanted £400, the other (we went with) was flabbergasted and said he gets his pay through commission.

You can then compare the deals you are offered against ones you see online, just to be sure you know where you stand.

Good luck.
I went for a fixed rate mortgage meaning the rate will stay the same for 2 years, unless it drops then it will drop but it will never go higher then the fixed rate, after the two years is up it could fluctuate and either go down or a little higher.

Also make sure you know how much deposit you will use
When you are considering going to university for a 4-5 year course is it better to rent or buy???
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