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Is Buying A Property A Traumatic Experience??
by Jason Samuel
http://www.awisemortgage.com
When we take on our first mortgage (in French meaning death
guarantee!) it is a huge step in our lives and one that we
could well still be paying thirty years later. Some people
thrive on the challenge, others fail to maintain the
repayments and have their homes repossessed whilst the
majority continue to plod through their lives moaning about
their repayments but contented to be home owners.
If this is your first purchase, you need to study the
market for several months so that you feel comfortable
about the location you want and the current values of the
type of property that you're looking for. Many people fall
in love with the first house they see or one that is
particularly pretty but sitting on the edge of a quarry!
Look at the location and make that your priority rather
than cosmetic things that can be changed relatively easily
and cheaply. If you are thinking about living in this house
for just a few years then think about the resale value. Try
to find something that will appreciate in value; again,
this often goes back to finding the right location.
Try to use this time of research to save for your deposit.
Most lenders like you to have ten per cent of the value of
the property but remember that you will have other
overheads; a survey is expensive but can literally save
your skin, in addition, there will be stamp duty and
lawyer's fees that you need to budget for. On some new
properties the competition is so fierce that builders are
offering to organise mortgages of one hundred or even one
hundred and twenty five per cent (the extra is to carpet
and furnish the house). With the chance of living in a
brand new house with everything in it brand new also it can
be very, very tempting but remember that these lenders are
not your friends and they are just doing this to make money
out of you. You'll find that you're paying considerably
more interest and you'll also have to sign a Mortgage
Indemnity Guarantee (a MIG) which will be a quite a
financial commitment for you. Depending on your
circumstances, these deals can be good but the major thing
to consider is whether you are likely to make a healthy
profit when you sell.
Be clear about how much the monthly repayments will be.
Don't be swept away with the glamour of the deal. You still
need to live comfortably and pay your bills so work
strictly to you budget. If you can keep something aside for
a rainy day, you'll feel more comfortable (even if you
never have to use it). You'll have to decide what type of
mortgage is right for you. If you like to know exactly
where you are, then a fixed rate could help you. If,
however, you like to gamble, you can go for a flexible
loan. With this, you are likely to be better off at times
but you're vulnerable if the interest rate were to rise
steeply.
It's worth spending time and energy negotiating the best
deal. There are just so many companies offering variations
that it changes overnight (or even over the course of a
phone call) but a good deal can save you many thousands of
pounds. In addition to the savings, check that there aren't
penalties if you want to move to an alternative lender
before the term finishes.
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