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Home Movers

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Buying your next home is hugely exciting but it can also be quite daunting and nerve-wracking. 

Buying your next home is hugely exciting but it can also be quite daunting and nerve-wracking. One of the things many buyers worry most about is applying for a mortgage. With thousands of mortgage products available how on earth do you know what to go for?

Choosing a mortgage is actually more straight forward than you might initially expect. Here we explain all you need to know to help you find the best mortgage to enable you to buy your first home.

Deals for Home Movers

There are thousands of mortgages on the market, and they are all theoretically available to next-time buyers. Many banks and building societies also package specific deals for next-time buyers.

How much can I borrow?

It’s a good idea to work out roughly how much you can borrow before you go house hunting. There is no point in picking your ideal home only to find that it is beyond your financial reach.
In the past, lenders traditionally calculated the amount you could borrow as a multiple of your salary. So, you might typically be granted a mortgage of three times your gross annual earnings. But most banks and building societies these days advance funds according to affordability and will ask for details of your incomings and outgoings before they decide on a figure. They will also take into account the impact of future interest rate rises.

Using your equity for a deposit

You will almost certainly have to use some of your equity because the days of a 100% mortgage are gone. Some banks and building societies will lend up to 95% of the property’s value – this will be described as the loan to value of LTV. In other words, you will need a minimum deposit of 5%. You will have a wider choice if you can put down a 10% deposit. However, the very best rates are reserved for borrowers with a big deposit – in some cases you’ll need as much as 40%.
Therefore, aim to save as large a deposit as possible because you will have access to a wider range of mortgage products and be able to benefit from more competitive rates.