Mortgage Chain understand that buying your first house can be one of the biggest steps you make in your life. Taking this into account our Advisors can provide Mortgage Advice tailored for First Time Buyers. We can provide products that are available to first time buyers only which for example may offer cash back or costs towards solicitor fees.
Every Mortgage and lender is different. At Mortgage Chain we understand this, and will be able to provide you advice specific to your situation and requirements.
During your meeting with an Advisor, you will have the whole process explained to you, how the associated parties lined to your purchase provide their support and assistance, why they are needed and the associated costs throughout. The charts below give the areas that need to be thought about and will be expanded upon during your meeting.
When providing advice to First Time Buyers, we breakdown the appointment into the following stages.
The first stage, the Advisor will introduce him or herself and will explain how Mortgage Chain work, in regards to providing Mortgage Advice. We will talk you through the different Mortgage Products available on the current market and finish with an introduction of an 'Initial Disclosure Document' which explains the commissions we receive and any fee's we charge.
This will involve the Mortgage Advisor asking lots of open probing questions, in order to understand your situation fully. This will include a 'fact find' in where your financial and personal situation will be discussed which will start forming a picture of the amount of Mortgage you can obtain and options available to you.
The third stage is tailored around 'Advice and Recommendation'. This is where a Mortgage Advisor really earns his fee, as understanding your situation fully and providing advice reflective of your requirements is critical. We will provide our recommendation to you, in the form of a Key Fact Illustration, explaining why we are recommending the associated product (s). This will breakdown your monthly commitment and any related costs. It is worth noting at this stage that you will receive a 'suitability letter' after the appointment, which will be a reflection of the meeting and recommended advice.
We will look to acknowledge your understanding of the meeting and the process, especially your relationship with the risks involved. You would then have the option to proceed straight away, take the details away to discuss further or book in a second appointment to submit the mortgage application with the associated lender!
Mortgage Chain will help you get from the meeting stage through to owning your first property.
Once you have decided your are going to proceed, a mortgage is agreed in principle which involves a credit check. The next step would be to go and look for a property. At this stage you will know what Mortgage amount you can borrow.
The offer you place on a property is accepted!
Once you have found your dream home, we will submit the Mortgage application & progress the whole process until you move in.
The different Mortgage Products Available
A fixed interest rate Mortgage is a loan where the interest rate doesn't fluctuate during the fixed rate period of the Mortgage. This allows the borrower to accurately predict their future payments and budget accordingly with the security that the monthly payments will not change for a chosen period of time, typically 2, 3 or 5 years.
Tracker mortgages move directly in line with another interest rate – normally the Bank of England’s base rate plus a few percent. So if the base rate goes up by 0.5%, your rate will go up by the same amount. Usually they have a short life, typically two to five years, though some lenders offer trackers which last for the life of your mortgage or until you switch to another deal.
This is a discount off the lender’s standard variable rate (SVR) and only applies for a certain length of time, typically two or three years. But it pays to have Mortgage Chain look at different lenders for you. SVRs differ across lenders, so don’t assume that the bigger the discount, the lower the interest rate.
These work by linking your savings and current account to your mortgage so that you only pay interest on the difference. You still repay your mortgage every month as usual, but your savings act as an overpayment which helps to clear your mortgage early.
A flexible mortgage is one that gives you the ability to overpay by any amount, draw down on overpayments and repay your mortgage loan at any given time without penalty. Hence the name. This can be very useful if you are looking to move quickly or rem-mortgage again following home improvements. Flexible mortgages will either track the lenders standard variable rate (SVR) or the Bank of England Base rate. See our Mortgage Glossary (Link below) to understand all the mentioned terms.
There are three different ways you can repay your mortgage: repayment, interest-only, or a combination of the two. Read below to learn more about your mortgage repayment options.
This is the most popular and most widely available mortgage repayment option.
With a repayment mortgage you’ll make monthly repayments for an agreed period of time (known as the term) until you’ve paid back both the capital and the interest.
This means that your mortgage balance will get smaller every month and, as long as you keep up the repayments, your mortgage will be repaid at the end of the term (usually 25 years).
Be aware that when you start your mortgage, the repayments will mainly be interest, so if you want to repay the mortgage or move house in the early years, you’ll find that the amount you owe won’t have gone down by much.
You must also then decide the type of repayment mortgage you want, whether it’s to have the interest rate fixed over time, or variable, which means the interest rate can go up or down.
With interest-only mortgages you only pay the interest due on the amount you borrowed each month.
So while your monthly payments will be less than with an equivalent sized repayment mortgage, you will still owe the amount you originally borrowed when you reach the end of the mortgage term.
Just like repayment mortgages, you can fix the interest over time or it can be paid back at a variable rate.
Paying back the capital:
Lenders will make sure you have a repayment strategy in place, so that you’ll have money to pay off the capital at the end of the mortgage.
Lenders have different criteria, but a suitable repayment plan is likely to mean paying regularly into savings or investments and could include pensions and other properties. Repayment of property is also an option but it must be evidences that you have suitable equity or could downsize into another owned property.
Some lenders offer mortgages on a part-repayment and part-interest-only basis.
This option means that at the end of the term some of the mortgage capital will still be owed and will need to be repaid.
Each lender will have different rules about this.
To get an idea of what your monthly payments maybe, or what stamp duty you may need to pay, head over to the Mortgage calculators section.
New Build Mortgages options are also available for first time buyers. Please see our New Build Mortgage page for further options.