Easyswitch Mortgages - 08456 800898

Buying a new house or flat can be daunting for anyone, whether it is for the first time or the tenth time - the key to making it as successful and easy as possible is to plan well and get help along the way.

When you are looking for a property, there are a million different combinations of features, benefits and other factors to consider, so we will leave you to find the property of your dreams!

But when it comes to finance that property purchase, you need to understand what you can borrow, what types of property are easier to buy, and what the next steps are.

Types of Mortgages

There are the normal fixed and tracker style mortgage options available for most clients looking to fund a property purchase. Specific First Time Buyer Mortgages are rare these days, as almost all purchase deals are available to those buying for the first or subsequent times. There are some lenders who will give you a free valuation or similar incentive.

Fixed rate mortgages are typically between 1-5 years in length, and simply allow you to fix the monthly payment for that term, irrespective of what happens to the base rate over that period of time. Especially useful for those looking to budget. Fixed Rate Mortgages are priced a bit higher than average Tracker Mortgages, but we would suggest that the difference in price is like an insurance against increases that may happen in the future.

Tracker, Discounted and Variable Rate Mortgages are all very similar - the rate fluctuates mainly in line with the Bank of England Base Rate, however Discounted and Variable Rate Mortgages may change due to a decision of the lender. A Tracker Mortgage (most common) simply tracks the Bank of England Base by a set margin - i.e. if you mortgage rate is 3.5%, and Base Rate is 0.5%, then the margin is 3% above whatever the Base Rate is.

This type of mortgage is suited to those who can afford to pay higher payments in the future, and are happy to take that risk at the moment given that the tracker rates are lower than average. Some lenders do allow you to switch from Tracker to Fixed during the initial rate period, so if you are concerned about future rates, please give us a call.

Agreement to a Mortgage

If you have settled on the style of mortgage (Fixed or Tracker), the next step is to get the mortgage 'Agreed In Principle' - We would obtain your personal details and mortgage needs, and then approach the lender to see if they will lend you what you need to buy your new home.

Is this easy? It might be, but for many at the moment this can be quite a task.

With over 140 lenders in the UK, every mortgage provider has a different lending criteria, based upon income multipliers or an affordability calculator. All lenders treat overtime, commission and bonus payments differently, so if you get regular additional income this will influence who can lend you what you need. If you have a Home Mortgage or a BTL Mortgage some lenders will want further details about your plans for these, such as rental income, mortgage payments, getting 'Permission to Let' and other information.

Other committments will make a diffference, such as credit cards, personal loans, maintenance payments, large monthly outgoings and your credit file.

The 'Agreement in Principle' is based upon information that you supply - if you have overstated your income or forgotten key committments then the Agreement might not be binding, so please make sure you have your information as accurate as possible.

What importantance does the Credit File have?

The majority of lenders they are looking for clients that have an excellent credit file - a database of all your credit committments and how you have paid your monthly payments. This will include credit cards, bank accounts, loans, mortgages and other arrangements such as mobile phones and car insurance.

If you have missed a few payments or been late with a payment, this will inevitably make it more difficult to get the mortgage you want.

In 2010 we have seen more lenders enter the market who specialise in lending to those with minor credit issues - as a Mortgage Broker we have exclusive access to such lenders and we would be happy to understand your circumstances and see if there is a solution for you.

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