First Time Buyer Ideas

Here are first time buyer ideas for you regarding the biggest purchase of your life.

There has been a radical tightening of the money supply, plus there are so many different types of new mortgages - buy-to-let, interest only, fixed rate, etc.

Therefore, first of all you need to decide the one which is best suited to your needs - this could involve help from an Independent Financial Adviser.

Importantly you will need to compare rates as these are governed by the Bank of England base rate.

If you are a first-time buyer just read on for our ideas on the subject.

Our first and probably the most important of our first time buyer ideas is how is your credit rating?

You will then need to calculate how much money you have left after your out-goings have been calculated, only then will you know here you stand. For safety always over estimate your outgoings and under estimate your incomings.

Set up two columns – either on a sheet of paper or computer Excel page. Write down all the money incoming per month in the first column, all the out-goings in the second column. This figure must include leisure, travel, etc. in fact all the money you spend. When this is done -

Subtract the total spending from the total income and you will see how much you have left potentially at your disposal for one of the new mortgages. Look to see if you can possibly put a small amount of this ‘spare’ money away into a small ‘defence’ spending fund. Emergencies do and will happen! This is one of the best first time buyer ideas - keep yourself as well protected as you possibly can.

When you see your mortgage broker/adviser you will have to hand the information you need. See if he can provide you with more first time buyer ideas. He is probably making a good commission on the deal, so make him work for his money and get all the information you can.

As you can see the market is plagued with pitfalls. To sort out the maze it may be necessary to use an independent Financial Adviser.

Check his/her credentials first.
Ask all the questions you want as to their actual independence, i.e., where do they get their income from?
How much of this is commission?
In some cases it can be as much as the entire amount of your first mortgage payment.
Check whether this will apply to you, then negotiate.
Remember, you are in the position of an employer here, therefore you need to sure of your staff.
Don't be afraid to ask questions, a lot of your money depends upon it.
Most important of all, don't allow yourself to be intimidated. You hold the purse strings and stick to our first time buyer ideas. When meeting your financial Adviser for the first time, take a note book with you listing all the questions you need to ask. Make a note of the replies.

At the time of writing it is difficult to obtain a mortgage, house sales are slow and house prices are dropping. Use these circumstances to your advantage and drive a hard bargain.

Remember, if you go to a bank the 'independent' adviser there will be one who recommends the bank's own new mortgages. Also an estate agent usually has an 'arrangement' with any financial adviser they recommend. Therefore, you can see why it is necessary to ask plenty of questions - or best of all, engage the services of an Independent Adviser. But again - make sure you ask plenty of searching questions - as above. You do not have money to give away. Just follow our first time buyer ideas as a safety precaution.

This is so important, we can only repeat -
Ask as many questions as you feel necessary.
Stand your ground and don't be sold a pup.
It is a house you are looking for.

For a list of unauthorised firms take a look at

Four main things affect your monthly repayments:

1. How much you borrow.

2. How long you borrow it for.

3. Which one of the new mortgages you have
(e.g. interest-only or repayment); and

4. The interest-rate deal you choose.

Budget for the future.

If you choose a variable rate (including a discounted or tracker rate), be prepared for your monthly payments to go up when interest rates rise. Although if you are lucky to have your rate fixed very low, at the moment this is an advantage.

If you choose a low, initial fixed rate or a discounted rate mortgage, allow for the increased cost when your interest-rate deal comes to an end. This has been a very unpleasant shock for some borrowers recently resulting in an increased number of calls to the CAB (Links Page) for help in coping with the situation. At the time of writing interest rates are at all time low, but this does not seem to be reflected in the interest being charged on first-time mortgages. First time buyer ideas are unfortunately few on the ground when it comes to negotiating interest charges. You can only shop around.

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You may be able to afford the repayments now, but think about what could happen if, for example, your income falls or you or your partner lose your jobs. What if interest rates rise and your monthly repayments go up? What if one of you falls ill for a period of time?

Sorry to be so pessimistic, but you have to work out how you can more or less make yourself bomb-proof. This is all part of the first time buyer ideas to help keep you safe.

If you are coming to the end of a fixed rate mortgage, you should start organizing your next deal as early as possible - as much as three months before the end if you can. Use a broker who is able to search the whole of the market, i.e., not tied to any building society etc. John Charcol (0800 718191) and London and Country London and Country Mortgages are at present the only nationwide brokers fitting this criteria. Please make your own check here to be completely satisfied. You are looking for first time buyer ideas, make sure you get all the help that is on offer.

Therefore, do not go for any of the new mortgages that are going to drain your finances dry. Think what your prospects are in your job. Are you contemplating starting or increasing the size of your family?

There is another route to getting a mortgage which you might be able to adapt to your own particular circumstances.

1. Go to the Bank of Mum and Dad.

2. If you are able to get a partial loan from M & D and can find a lodger for the spare bedroom this should ease your situation.

3. Aim at a property that will just give you a step on the property ladder, but still exercising all the precautions that are outlined in our extensive Property Section.

4. Stay a little longer at home with your parents, economise all you can and build up your bank balance for your deposit on whichever one of the new mortgages you settle for. Always assuming M & D will have you!

5. Renting is a definite no brainer. Nothing to show for all your years of rent payments.

These are some of our first time buyer ideas. Read and make use of them.

If you do get into difficulties......

Get specialist debt help We have put together an 'easy-to-follow' page Mortgage Debt and Advice which explains how to find help should you need it.

It's crucial to talk to your mortgage lender as soon as possible otherwise you could risk losing your home. You may be able to come to an agreement with them, such as a payment plan, and avoid more serious problems. Don’t delay and pretend it is not happening.

There is a FREE book - Debt Free the Easy Way - available to point you in the right direction. Just follow the instructions given at Free Books

It may be a good idea to get some free and independent advice before making any major decisions. Various agencies specialise in dealing with financial difficulties and can help you plan how to solve your problems. These are all listed on the page above.

Top tips

1. Research your subject and make sure whichever one of the new mortgages you choose it is the right one for you.

2. Don't borrow the maximum on offer unless you’re sure you can afford it. Work out how much you can afford.

3. Plan your budget for now and the future.

4. If you're getting into difficulties speak to your mortgage lender or a specialist debt agency as soon as possible. Delay here could mean disaster.

5. Economise to help your budget stretch further and keep an eye on this site for all the money saving tips on offer.

6. Find out what your monthly repayments might be and to see the effect that a change in interest rates could have on them.

7. Try to make yourself bomb-proof.

8. When you see an Independent Mortgate/Financial Adviser take a notebook with all the notes you have made, all the questions you need to ask. Don't be afraid of asking what you might possibly consider foolish questions. Don't let anything pass on which you are not quite clear. Clarification is important - this is a complex business. This is his job, you are employing him. Keep control of the situation and when your interview is finished your mind should be clear as to which route you should be following. It is your future. He should be able to give you plenty of first time buyer ideas and help.

These first time buyer ideas are here to help you, not to scare you - to point out the pitfalls and help you avoid them.

Happy House Hunting!

If you missed the latest edition of the Newsletter you can read it here.


Mortgage Debt and Advice

Conveyancing - the Tricks and the Traps

Houses Can Make and Save Money for You

A Damp and Timber Surveyor

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