First Time Buyers

A mortgage is a long term loan, used for the purchase of a property.
In old French it literally means a death pledge, but don’t let that put you off!.
The length of a mortgage, or its term, can be as short as 5 or as long as 45 years.
When you secure a mortgage, it’s important to understand that the property you are purchasing (or another asset) acts as a guarantee against the loan.
Not keeping up with your mortgage payments can result in the lender repossessing your property.
Mortgages exist to help you secure a substantial loan, however, you will always be expected to put a deposit towards the cost of the property. Usually no less than 5% of the total value.

Mortgage interest rates determine how much you will be charged to borrow and buy a property, and what your monthly repayments will be
Introductory interest rates are often offered for the first few years – usually between 2 – 5 years.
First-time buyers often chose to take a fixed rate mortgage. Fixed rate means that a set rate is applied for a certain period.
Lenders will have their own Standard Variable Rate (SVR). This is a rate set by the lender and will almost always be higher than the introductory rate.
After the introductory period ends, you’re transferred onto your lender’s SVR, you should always be reviewing your mortgage options before this takes place. There will be better rates available to you

Lenders make a return on your loan by charging interest.
You can choose to pay back a percentage of the outstanding mortgage balance – i.e. the amount you borrowed – each month alongside interest payments. This is called a Repayment Mortgage.
Or, you can chose to only pay the interest on the loan each month. This means you have to clear the total loan amount at the end of the term. This is called an Interest Only Mortgage.

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