The most important
thing to do, especially if you are a first-time
buyer, is to think sensibly about the whole
buying process from initial budgeting to
getting a good mortgage package.
Below are a few hints
and tips to help you on your way.
1. Start by assessing
how much you can afford. Think about your
current outgoings and also any changes
that are likely to occur in the future,
like having children or buying a new car.
2. Consider carefully
the type of mortgage you take. Shop around
and talk to an Independent Financial Adviser
to help you make the right decision.
3. Consider taking
out protection against accident, sickness
or redundancy to provide yourself with
some money, should you be unable to work.
4. Get a decent valuation
done and consider spending more money
on a detailed report such as a full structural
5. Choose your solicitor
carefully, and get a good estimation of
the likely costs you will have to pay
6. Your house is
a home, not an investment. House prices
have been known to fall so don't overstretch
yourself in the hope of making a fast
7. Check the mortgage
you decide upon for redemption penalties,
which can stretch far into the future
and prevent you from changing to a better
8. Make sure the
product you take is portable. This means
should you move home, you can take your
loan with you.
9. Pick a mortgage
lender and/or financial adviser of good
10. Consider the
merits of flexible mortgages, as many
allow you to take payment holidays which
could help to ease the financial burden.
11. If buying a property
with a boyfriend or girlfriend, consider
taking out a joint tenancy or tenancy
in common to protect yourself should you
split up at a later date. Your solicitor
will help you with this.
In any event, it is
always best to seek independent financial
advice to ensure you receive impartial,
objective points of view, and products that
are suitable to your individual circumstances
You borrow a lump sum over a fixed period
of time (usually 25 years). You pay the
interest and some of the capital on a
monthly basis to the lender. Can be slightly
more expensive than endowment or PEP mortgages.
Not much capital is paid off in the early
Endowments have plummeted in popularity
following widespread mis-selling during
the 1980s and it's far less common for
people to buy in this way today. The basic
principle is that you borrow the sum for
your house purchase, but then make two
payments a month; one to pay the interest
on the sum and the second into an investment
vehicle which, at the end of the mortgage
term, should be enough to pay off the
loan. Endowments were popular for their
flexibility, but many homeowners have
found, to their cost, that their investments
failed to meet their loan commitments.
Again, you make two payments. One to the
lender to repay the interest on your borrowings
and another sum into a personal pension
plan. The aim is to build up the pension
fund sufficiently to repay the loan and
provide a retirement income.
It is also possible
to combine two of the above options to repay