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Buying a First Property
Buying a first home is very exciting but can become a trying situation especially if a lot of thought has not gone into the initial plans.
Finances are foremost starting with the deposit. The larger the deposit the small the mortgage needed. Plus more lenders will have a larger choice of products. If 5% is saved there is an even wider choice but this amount is hard to save these days as on a £200,000 property this would amount to £10,000.
Buying without a deposit but because this represents more a risk to lenders the mortgage rate will probably be higher.
A few lenders offer a bigger mortgage to those who agree to a five or ten year fixed rate product as the repayments stay the same making it easier to afford.
Those purchasing property for the first time are often surprised by the amount of fees and charges that are made. Stamp duty can be expensive at 1% of property price and then there are surveys, searches and solicitors fees on top. A survey found that only 10% of first time buyers thought of saving for these expenses.
Many lenders will offer fee free mortgages but rates are often higher and dearer in the long run. Some may also charge a Higher Lending Charge if little or no deposit is available. This question should be asked before any arrangements are made as it could run into thousands of pounds.
• Research all types of mortgages on offer before agreeing to any product
• Remember to add all costs of fees etc. to finance plans
• Consider part ownership if only low mortgage offered
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