Home Loans for First Time Buyers: Ways of Finding the Best Online Mortgage Quote

Buying a house for the first time can be a daunting prospect. There are hundreds of mortgage providers from online mortgage lenders to specialist providers to smaller brokers, all actively searching for business from first time buyers. A mortgage search can be confusing but a good start is to know what competition is out there, what costs are involved and how to get the best deal.

Getting a Quick On Line Mortgage Quote

These days, most mortgage lenders provide a mortgage calculator online which is quick and simple to use. The information is generally for illustration purposes only and does not contain all the details necessary to make a full application, but this initial quote will give a prospective first time buyer an idea of costs, repayment terms and interest rates.

Once the prospective home owner has a mortgage quote best suited to his or her needs, the quote can be saved and a Key Facts Illustration obtained. A mortgage company is obliged to provide an applicant with a KFI before proceeding with the mortgage application. A KFI is a full quote and contains details of all costs, fees and charges involved and will allow the potential buyer to compare the costs and features of different mortgage lenders easily.

As a First Time Buyer, How Much Deposit Will Have to be Paid?

The amount of money needed for a deposit will depend on factors such as the buyer’s credit history, type of mortgage and the value of the property. Typically, first time buyers need 5% of the property value, although a deposit of less than 10% may mean higher lending charges.

If a first time buyer is unable to come up with a deposit, he or she may want to consider Guarantor Mortgage, which enables the first time buyer to appoint a guarantor (typically a parent or guardian) to the mortgage application.

What Other Costs are Involved?

In the UK, first time buyers can expect to factor in costs such stamp duty, legal fees, a mortgage indemnity guarantee, lender’s valuation fee, survey fee and insurance. These fees can come to a total of approximately £4000 on a £100 000 property.

What is the Best Mortgage for a First Time Buyer?

There is a huge variety of mortgage loans on the market. The majority of first time buyers choose a fixed rate mortgage or tracker mortgage. A mortgage website or finding specific online mortgage lenders is the best place to start researching all the possible options.

The potential buyer should compare at least three results. If the process seems overwhelming to a first time buyer, it may be a good idea to involve a mortgage broker, who will shop around on behalf of a client to find the best mortgage lender and negotiate the best rates and terms.