Mortgages made easy

Posted on 4 Jan 2019 at 01:36 PM

Mortgages made easy

Buying a home is probably the biggest purchase you’re ever going to make. And you’ll likely to need a mortgage to do so. Mortgages come in a variety of forms, and can appear confusing if you don’t know what you’re looking for.  

What’s right for one person may not work for you. So, before you dive into anything too quickly, it’s worth spending some time ensuring you make the right choice for you. 

What is a mortgage?  

A mortgage is a loan you take out to purchase property or land. You pay interest on the mortgage and your lender uses your home as security for the loan. This means if you can’t keep up repayments, your lender may take back your home and sell it to get their money back. 

Most mortgages run for 25 to 35 years, but the term can be shorter or longer. 

How much money can I borrow? 

Each lender will carry out a mortgage affordability test to work out how much they will lend you. Many mortgage providers have online tests that you can take on their website. 

Your affordability will be based on your salary, plus any other income you may have. This is then weighed against your current financial outgoings, including debts and personal expenses. 

It’s important not to stretch yourself when deciding how much to borrow. Remember you need to think about the running costs of owning a home, such as household bills, council tax, insurance and maintenance. 

Mortgage lenders may refuse to offer you a mortgage if they don’t think you can afford it. 

How big a deposit do I need? 

When buying a home, you need to pay a deposit. This is an amount of money that goes towards the cost of the property. It will need to be paid in advance, so you should already have the funds before you start the process of buying a home. 

A deposit on a property is normally 10-20% of the overall purchase price, although shared ownership mortgages can be as low as 5%. Remember – the higher your deposit, the lower the interest will be on your mortgage. 

With a shared ownership home, your deposit could be as low as £2,000. 

Where can I get a mortgage? 

You can go directly to a bank or building society to get details of their mortgage offers. Most lenders will have a range of different products available. 

You could also use a comparison website to compare deals from different lenders, just like you would when getting car insurance. But you should be aware that comparison websites won’t show you all the options available. 

However, unless you’re experienced with financial matters in general, and mortgages in particular, we would recommend using a mortgage broker or independent financial adviser. These experts can help you to compare mortgages and make the right choice. 

We work closely with TMP  The Mortgage People, who provide expert advice and assistance to guide you through all the steps of getting a mortgage and moving into your new home. 

Which mortgage should I choose? 

There is no right or wrong answer to this. A mortgage should be tailored to suit your individual needs and expenses.  

There are thousands of products available on the market, and the deals and interest rates available can change on a daily basis 

Choosing a mortgage is one of the biggest decisions you’ll make, so it’s important that you think it through carefully. If in doubt, we would always advise getting independent financial advice. 

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If you would like any more information on shared ownership homes and how a mortgage might work for you, our team are here to help. You can email us at newhomes@cerrishomes.co.uk or call us on 01782 854748.