First Time Buyers

FIRST TIME BUYERS

Buying your first home is one of the most exciting things you’ll do. There is so much to think about, including finding the right mortgage. We at Mahay Financial Services will guide you through everything from saving for your deposit right through to getting the keys to your new home, this would include the mortgage options, the types of interest rates available, tips for house hunting and information about conveyancing.


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Factors to Consider

A key factor to consider is the assessment of your income and affordability which must evidence your ability to support repayment of the mortgage. You should also consider the term of your mortgage, which is the length of time you require to repay your mortgage and is usually around 25 years. You are able to extend the term, depending on the age you plan to retire, which would reduce the amount you repay each month making the mortgage more affordable. However extending the term would also increase the total amount of interest you will pay over the term because you are borrowing money for a longer period of time. The shorter the term, the lower the amount of total interest you pay will be.

Think about the amount of deposit you'll need. Usually a deposit of at least 5% of a property's value is needed. The more deposit you have, the better the mortgage deal you can get and this could mean a lower interest rate.

There are 3 ways to repay your loan - repayment, interest only or a combination of both.

There are 3 ways to repay your loan – repayment, interest only or a combination of both

Repayment mortgages

Each month, you'll pay an extra amount on top of the interest. This extra amount pays off the loan over the life of the mortgage. During the early years of your loan, your monthly payment is mostly used to pay off the interest. However, as the loan is repaid, the interest becomes less. Which means more of your monthly payment is used to pay off the mortgage.

Interest-only mortgage

Each month, you only pay off the interest, with the mortgage loan being repaid at an agreed time in the future. You must have a plan in place to repay the amount you borrow. This is regularly reviewed to make sure you're on track to pay off the mortgage balance.
It's your responsibility to pay off the loan when the mortgage ends. If you don’t, you may have to sell your property.

Part repayment and part interest-only mortgage

You can also combine both types of repayment. For this, your mortgage is split into two parts: capital and interest repayment and interest-only repayment, This means at the end of the mortgage term, you'll still have some of the mortgage to pay off.

You'll need to do this using a lump sum (one payment).
As with an interest-only mortgage, you need to have plan in place to repay this amount at the end of the term.

For more information please fill in the find out more form or give us a call and a dedicated account manager will run you through the process.

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How much can I Borrow?

Use our quick calculator below to work out how much you could potentially borrow (GBP)

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"*All potential borrowing is subject to due diligence, lender criteria, affordability checks and credit status.

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