Step 3: Choose a Mortgage
There are literally thousands of mortgages out there in the market to choose from, but fortunately there are only a few really crucial things you really need to know about them. First, the most common types for first time buyers are:
Another key fact to be aware of is that some mortgages have a lock-in period. Imagine that after a year you want to move house, move your mortgage to a different lender, or even sell up and go back to renting. This may mean repaying your mortgage. Some lenders make you pay a lump sum (sometimes quite a large lump sum) as a penalty if you repay during the lock-in period, which could be a year, two years or even longer. Lock-ins aren't all bad, as you often get a lower interest rate during the lock-in period, or for part of it.
The third key point is that different mortgages suit different people. For example, if you're stretching yourself to make the repayments, you might want to go for a fixed rate loan so that you know your monthly payments will stay the same during the agreed period. But this won't necessarily be the best choice for everybody.
With all this choice, and so many lenders queuing up to lend you money, it makes sense to get independent advice. Our advisers search the whole of the market and can help you find the mortgage that's right for you. And with our strong 'duty of care' ethic, we'll make sure you know exactly what you're getting into before you sign on the dotted line.
There are literally thousands of mortgages out there in the market to choose from, but fortunately there are only a few really crucial things you really need to know about them. First, the most common types for first time buyers are:
- Fixed rate, where the repayments stay the same for a pre-determined period whether interest rates go up or down.
- Variable rate, where the repayments can go both up and down.
Another key fact to be aware of is that some mortgages have a lock-in period. Imagine that after a year you want to move house, move your mortgage to a different lender, or even sell up and go back to renting. This may mean repaying your mortgage. Some lenders make you pay a lump sum (sometimes quite a large lump sum) as a penalty if you repay during the lock-in period, which could be a year, two years or even longer. Lock-ins aren't all bad, as you often get a lower interest rate during the lock-in period, or for part of it.
The third key point is that different mortgages suit different people. For example, if you're stretching yourself to make the repayments, you might want to go for a fixed rate loan so that you know your monthly payments will stay the same during the agreed period. But this won't necessarily be the best choice for everybody.
With all this choice, and so many lenders queuing up to lend you money, it makes sense to get independent advice. Our advisers search the whole of the market and can help you find the mortgage that's right for you. And with our strong 'duty of care' ethic, we'll make sure you know exactly what you're getting into before you sign on the dotted line.
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