Helping you find the true cost of taking on a mortgage

There are many things that can actually affect the cost of a mortgage. Making sure you have the facts and the information to establish the cost of a mortgage must be a priority for anyone who may be looking to take on a mortgage for the first time, maybe you’re looking to move home or maybe remortgage.

The cost of a mortgage if you’re taking one on for the first time.

If you’re considering purchasing your first home it can be overwhelming but exciting at the same time, you must appreciate that what you’re about to step into is a huge financial commitment. We have compiled a list of the main expenses you could expect to pay as a first-time buyer. Hopefully this will go someway into preparing you for the purchasing of your first home.

How much generally will a first-time buyer need to put down as a deposit?

In many cases if you’re looking to take one of the first time buyer mortgages you can expect to put a deposit in somewhere between 5% and 25% of the purchase price of the property. Most of the research we carried out, suggested that first time buyers would struggle to put more than 10% down as a deposit. The deposit would usually be made up from savings or gifts from family members.

The average price of a UK home was at around £232,944 (according to Land Registry figures for October 2019), this means you need to have a deposit of more than £23,000 if you want to buy with a deposit of 10%, this means that you will be applying for a mortgage at 90% loan to value.

If you were able to have a bigger deposit, this will generally mean there is less risk to the lender and ultimately the lender may then be able to offer you better terms as a result. Which simply means you may be able to get a better rate of interest for the first time buyer mortgages.

Generally speaking, if you had at least a 25% or even more, your terms offered by the lender would be much more appealing.

Read also here: The Cost Of A Mortgage In Halifax

Things to consider as a first-time buyer in addition to the deposit

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Q. What will the monthly repayments be for first time buyer mortgages?

A. There are lots of ways that a lender may want to charge interest against your first time buyer          mortgages, they include:

It goes without saying that, the more you borrow, the more you will have to pay back to the lender. Although your actual monthly payment will be lower if you have a longer mortgage term. However, if you have a longer-term mortgage this will result in you paying interest on the debt for longer, so whilst the monthly payments may be more attractive, potentially the total amount you repay is likely to be much higher.

Q. What types of interest rates are there?

A. There are lots of ways a lender may want to charge you interest against your first time buyer mortgages they include:

The cost of a mortgage if you’re looking to move home

Buying a home would most certainly be considered a huge event in anybody’s life. Afterall it will normally take a good few years to pay off your new mortgage maybe even more if you had to look at bad credit mortgages. There is also a lot to understand and things you don’t want to forget in the buying process.

You may want to consider when purchasing your new home things like:

The list is almost endless, but the above is just a few suggestions you may want to ask the vendor.

Other costs to be taken into account when moving home

Potential upfront costs

Potential costs on the day of the move

The cost of a mortgage is you’re looking to remortgage

When you already have a home that is mortgaged and you are looking to switch your mortgage deal for a better deal this is what is called remortgaging and can help you reduce the cost of your monthly mortgage payments, but be careful when choosing a deal, you need to look at the overall cost of the new mortgage rather than the headline rate alone. If you are in any doubt, you ought to be speaking with a specialist mortgage broker.

A good mortgage broker will tend to take both the rate and any fees into account so that you can work out exactly how much you will save by moving to a new deal. You should also need to factor in any early repayment charges or redemption fees on your existing mortgage deal if you’re looking to remortgage before it finishes. You may at the time when you took out the initial mortgage have needed to look at bad credit mortgages, if this was the case you undoubtedly need to discuss your options with your mortgage broker when you are looking to remortgage.

Some of the fees that may be applicable when you decide to remortgage may include: