First Time Buyer Mortgages
Buying your first home is likely to be one of the most expensive purchases in your lifetime. Here at DJB Mortgages, we know you have searched tirelessly to find the right home, so we will do the same to find you the right mortgage. After all, you will likely have a mortgage for most of your adult life so it’s vital to get it right. As experienced mortgage professionals, we will lead you through the entire process starting with obtaining your provisional mortgage agreement, right through to collecting the keys of your new home. We will help you choose the right survey, and if you need, we can also place you with solicitors that we work very closely with, but we will also take care of any insurances that you may need to consider, think of us as your Project Manager. We are here to make this process run smoothly for you but we will also become your mortgage broker for life.
Savings & Deposit
There are many ways to purchase your first home, but one of the main things you will need is a deposit. Most banks/building societies want you to put down at least a 5% deposit, and this is what creates which 'LOAN TO VALUE' you gain, along with interest rates. Some lenders do offer 100% mortgages, but this is subject to family help as they will need to secure a percentage of savings with the lender or allow they may even look to take a charge over the family members property.
Many people will save into an ISA an as this creates a form of tax-free savings, however, you are only able to contribute a certain amount to ISA's each tax year.
How much can I borrow?
Finding out how much you can borrow can become very frustrating, you may have experienced this already by looking at multiple lenders websites and using their calculator's and find out they all give you different amounts. The reason behind this, all lenders will use different methods towards working out your maximum borrowing, but a rule of thumb is they will use an 'INCOME MULTIPLE' subject to other factors in the background such as loan to value, credit commitments, dependants, 'THE TERM OF THE MORTGAGE' and many other factors.
This is where we use our experience and knowledge, by having an in-depth discussion around your aspirations and gaining a clear picture of your current and future financial situation, we can make sure we are looking at leaders that will give you the best affordability for your situation if you are looking to stretch your income, or you may not need to stretch your income and this is where we find you the lender that suits your needs and financial situation.
Types of mortgages
When you start to dive deeper into the mortgage process you will discover that you have many types of mortgages available, from the type of 'REPAYMENT METHOD' such as capital and interest, interest-only, and part and part. Then you also have different TYPES OF MORTGAGES such as fixed, variable, tracker, discount, capped, and offset. This is the part of the mortgage that can also help determine what lender we may be looking to use for you, as not all lenders offer all of the above scenarios.
All of the above can have an impact on your affordability, this is due to lenders using some of these factors towards the calculations they make.
We will talk you through each option and explain which may be best for your situation, then essentially we will be able to create a shopping list of what is important to you on the mortgage and make sure we find a lender that suits all of your needs around the type of mortgage required.
Agreement in principle
Once an in-depth discussion has been had around your aspirations, and what is most important to you around the mortgage options, we will then look to discuss any issues around your CREDIT REPORT/SCORE. This is a very important part of the process, as once we have reviewed the credit report, we can then look to approach the lender suited to your mortgage needs, but also making sure that your credit situation matches that of the lender's appetite to lend to. The chosen lender will then either perform a credit score or credit file check, this will allow them to make a decision on whether to offer you a mortgage in principles. The agreement in principle will then confirm the amount of borrowing, and in some cases, lenders will confirm which products they are offering you based on the information they have accessed.
A big factor to point out though, this is only an Agreement in Principle, this doesn't guarantee you the mortgage once you have found a property, as this is subject to your financial situation not changing between the agreement in principle and full application, and sometimes even the type of property you have agreed to purchase, as lenders all have different lending requirements around construction types, etc.
Most Agreements in Principe will last between 30-days to 3-months, again depending on the lender.
Full mortgage application
You have now found your new home, had your offer accepted, so what do you do now? You will now need to proceed to a full mortgage application, but before the final parts of the mortgage are agreed we will have a conversation around what TYPES OF INSURANCES you may need to put in place to make sure that you do not lose your home should the worst-case scenario should happen.
Once we have agreed on a package you feel is right for your worries, we will then submit the full mortgage and relevant insurance applications to the lender and insurer(s). At this point, the mortgage will be fully underwritten as we will provide the lender with the relevant documents that they may request such as payslips, company accounts, bank statements, proof of deposit and sometimes many other documents, as this will allow them to agree on the case subject to VALUATION/SURVEY.
Once you have had an offer agreed to buy your first home, you will need to make sure that you have an idea of which solicitors you want to instruct to deal with the legal work on your behalf. The estate agents you are purchasing through will ask for these details so they can issue the 'MEMORANDUM OF SALE', this is the document that outlines the seller, purchase, property address to be purchased, agreed price, and then the solicitors both sides have instructed. This creates the formal introduction between the 2 solicitors, and they can then begin the legal works.
Once you have officially instructed your solicitor they will normally ask for some money to hold on your account with them, this is so they can start the legal works in applying for local searches, etc. However, the main part in the whole legal transaction is what we call the 'EXCHANGE OF CONTRACTS' this is when you officially agree and legally become bound to buy the property. Once you have exchanged contracts, you will normally complete a week or two later, and this is when you gain the key to your first home.
DJB Mortgages can help you choose a solicitor that would work for your requirements, be that an online solicitor, or with a local one.