The process
The mortgage market has changed dramatically over the last few years and the best deals are not necessarily available with your local building society branch. It is essential to seek advice from an independent financial adviser.
At BHP Financial we have qualified advisers who specialise in all types of mortgages. We do not charge broker fees and could save you time and money.
The Process
Your first step is to establish how much you can borrow. This depends on several factors and no two lenders use exactly the same formula. In general, most lenders will lend between 3 and 3.5 times a single salary and 2.5 to 3 times joint income. It is important to establish the amount you may borrow and the cost at an early stage.
First Time Buyers
There are a number of mortgages aimed specially at first time buyers including 100% mortgages for those who have been unable to save a deposit. This is one of your most important purchases in your life and it is important that you receive specialist advice in respect of the many schemes available and the most suitable option for your circumstances.
Interest Rates
The amount you decide to borrow also depends on how much the monthly repayments will be; this depends on the interest applicable at the time. Many lenders offer fixed rate mortgages, where the interest rate is fixed for a certain time period and will not change, even if the basic rate of interest goes up or down.
Other deals available are cashback where generally the borrower pays full variable rate and receives an upfront cashback based on a percentage of the amount borrowed.
There are also discount and tracker mortgages which go up and down depending on either a decision from the lender or the Bank of England base rate decision.
Many of these deals carry an early redemption penalty but it is possible to arrange a scheme without such a penalty.
There are advantages and disadvantages to all these deals and an adviser will go through these with you.
