First time buyer- silly questions around mortgages

[Grangey.]

Hi all,

So I'm currently looking to buy my first house, aaaand I have one or two silly questions.

a) to put an offer on a house do you have to have a mortgage agreement in principle? Or do you put an offer in THEN try to find a mortgage to suit? (what happens if you cant find one in that case- are there any penalties on you?)

b) Whats the best way to find the most suitable mortgage for you? Every estate agent I call when im enquiring on houses always tries to set me up with their in house mortgage advisor, some claiming to be "whole of market" others not... I'd love to know what the max I would be able to borrow would be and best deal, but without multiple searches accross my credit record from a multitude of these types trying to earn a commission...

c) Does bank loyalty have any benefit? Ive had my salary paid into a Halifax current account for the past 12 years or so with the same account having rent consistantly taken out etc etc. Would this sort of history make Halifax favour my application due to seeing such a consistant history of payments? Or does it mean FA and I'm more likely to get a better deal elsewhere?

Thanks in advance

Grangey

 

[fizl]

The rules between England and Scotland are slightly different, where are you looking to buy?

With regards to financial advisors for mortgages etc, one I have seen suggested many times is Mortgages | Mortgage Broker | Free Advice | London & Country Mortgages who are a fee free whole of market service. I know alot of people who have used them happily

I dont think bank loyalty particularly means anything, if Santander are anything to go by!

 

[imightbewrong]

a) depends on the buyer - some may insist on it to make sure they don't waste time with people that can't raise the funds. Normally here you would get an 'agreement in principle' with the bank

b) search the web / visit lenders / (talk to a broker?)

c) doubt it. we got a mortgage from a lender we had never used before - they had the best deal

 

[Dancook]

You can use something like this to see how much you're likely to be able to borrow, add your deposit to the results to see what kind of house prices you're looking at.
How much can I borrow? Calculator...

Consider that many mortgages require something like a 15% deposit, so if the calculator comes up with £150k, you can't just add a deposit of £5k and think you're looking at £155k houses.

Once you have an idea of what you can aim for, look at mortgage companies for deals and get a mortgage in principle before making an offer.

 

[njdbaxter]

you can get a mortgage in principle from a mortgage broker. Just says that xxxx bank will lend you xxxx pounds. Can get one from a broker in minutes.

once you are agreed on a house, you do not need to use the bank that offered the mortgage in principle. Interest rates always change and theres probably a better deal out there now especially if the mortgage in principle cert was issued 6 months ago.

another thing, having a mortgage in principle doesnt mean they will 100% give you a mortgage when you find a house, underwriters will have to approve it, and things may have changed with the bank from the time you got the mortgage in principle to the time you agreed on a house. Plus the bank will need updated bank statements, pay slips etc

 

[961]

First thing to do is to establish the sort of price you can afford bearing in mind your income and any savings you have

An independent mortgage broker will help

Mortgages - Mortgages & property - Which? Money

Mortgages | Mortgage Broker | Free Advice | London & Country Mortgages

Independent Mortgage Adviser - Compare the Best Mortgage Rates and Remortgage Rates - Residential and Commercial Mortgages

Once you have established that you can start to look for properties in that price range

Check your credit report at Experian and ensure it is clean. The £2 job will do fine

£2 Statutory Credit Report ? Experian UK

If it is not try to sort it before you apply for a mortgage

Bank loyalty does have a value but if you have a clean credit record and the right income a broker such as Which? or L & C may well serve you better

ENSURE when you enquire for any deal you make it clear you do not want your credit record marred by a credit application rather than a simple enquiry

You'll need to decide if you want a 2 year deal at a fixed rate or longer term at a variable rate. It's important to take into account upfront fees particularly on short term 2 year fixes. A life time tracker with no fee may well turn out cheaper

So. First. Find out how much you can borrow

Second, find the house

Get it surveyed and find a good solicitor (Haggle the fees)

Third, go to a broker such as Which? who will not charge a commission and where the staff are paid a salary and do not get a bonus on the deal (You do not need to subscribe to Which? to use this service)

 

[figoagogo]

b) Try London and Country (Brokers) - very good IMO

 

[Trollslayer]

These days the larger the deposit the better mortgage deal you get, it's a matter of risk management,

 

[Loftusrd1980]

I have recently bought my first property here in the UK.

I got a mortgage offer in principle just to mate sure i could get the money i wanted to borrow, they would in fact lend me a lot more than i was prepared to borrow. I only did this with one lender and didn't in the end go with them, don't get more than one offer otherwise it could affect your credit rating.

Not sure the point of brokers, i got a mortgage with firstdirect fixed for 2 years at 4.19 interest, 1000 start up fee though which u pay up front and i borrowed 90%. Loads of 90 % out there as well !! No limit on over payments either.

Remember solicitor fees can be considerable, i needed over £20000 cash to go through with my purchase on a 160000 purchase, borrowing 144000.