The first step in how to get a mortgage would be to sit down with us and discuss your circumstances and what type of mortgage you are looking for. There are several types of mortgages, each suiting different people’s circumstances.
Fixed Rate Mortgage
With fixed rate mortgages, your interest rate and monthly repayments will be fixed for a certain amount of time. This will mean you will know exactly how much you are paying each month for the term of the fixed rate.
This would mean however, that your interest rate will stay the same even if other rates go down.
Also, to leave a fixed rate mortgage before the term ends, you will incur an early repayment charge.
A tracker mortgage is dependent on the Bank of England Base Rate, meaning when this fluctuates, your monthly repayments will also change accordingly.
The interest payable on a tracker mortgage is usually a certain margin above the Bank of England Base Rate – for example the Base Rate plus 1.00% with some trackers having a “floor” of which the rate will not fall below.
Discounted rate mortgages are based on the lender’s standard variable rate with a reduced amount. They can often be low interest rates however they will fluctuate in line with the standard variable rate meaning if that increases, so will the discounted rate.
Flexible mortgages allow you more options with repaying back the loan. You are able to pay more than your regular monthly amounts when you are able to. There are also options to overpay and as a result, take payment holidays or pay less in future months.
Due to this lenience, these mortgages are user higher in interest rate.
The more deposit you have, the smaller the mortgage you will need and therefore the wider choice of mortgage deals you will have to choose from. As a minimum, you will need to provide at least a 5% deposit.
You could be eligible for a Government Help to Buy Scheme, if the property you are purchasing is worth up to £600,000. See our page on Help to Buy Schemes for further details [LINK].
You need to take into consideration the extra costs around buying a home. These can include things such as:
- Valuation Fees
- Conveyancing Fees
- Moving Costs
- Stamp Duty