More Solutions on How to Afford a Mortgage

Important note about your credit rating

Many websites don't make it clear that filling in their mortgage enquiry form means you might be credit checked.

This can put you at risk.

UK Mortgage lenders may assume an enquiry you have aleady made to another lender means you were turned down - and not that you are in fact carefully shopping around and rejecting the bad deals.

The best way around this significant problem is to ask an independent mortgage adviser to make anonymous enquiries for you.

Without risking your credit score an adviser can find you the best available mortgage deal. They will also know how likely you are to be accepted by the lender if you decide to make a formal application.

If you would like a recommended adviser to check out the best deals for you, anonymously, simply fill in the quick form below.

" Hmm..." You might think; "Won't I be hounded by a salesman hungry for my business? "

This is the most common question we hear from our users.

The answer is no you won't.

Firstly your enquiry is only passed to ONE person on a carefully vetted list of independent advisers.

Secondly, these mortgage advisers are professionals. Even when the market is slow they are busy people. There many people who need to move homes, or get a remortgage and are looking for advice all the time. Regardless of the state of the property market, life goes on.

So the advisers don't have time to hassle people. It just doesn't work like that. No one is gong to be forced into taking out a mortgage unless they really need one.

The advisers are very used to talking with people, perhaps like yourself, who are only "dipping their toes" into the water.

Many people just want an initial quick chat and if they feel comfortable will ask the advisor to contact them again later - often in several weeks or months. As a professional, the adviser will simply diarise this and call back at the appropriate time. There is no obligation at all.

(In the unlikely event that you ever feel at all "hassled" by someone on our list please let us know immediately. We have never heard of this. But if it happened we would definitely want to know).

"Thank you... the form was very quick. After many long phone calls to various lenders - where I'd go over the same details again and again - I was amazed at how easy you made it. You've saved me £1000's.... "

Peter B, Leeds

Mortgage Guide
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First time Buyers Guide
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More Solutions on How to Afford a Mortgage

Here are more detailed ideas on what you can do to afford your desired mortgage

• Consider getting a 100 per cent mortgage

If you’re having trouble getting a deposit together, you could consider applying for a 100 per cent mortgage.

With these, the mortgage lender advances you the full value of your chosen property, so you don’t need to put down any cash.

But remember, the value – as determined by a surveyor – and the price you pay may not be the same thing.

If you agree to a higher figure to secure your new home, you may have to find the difference yourself.

And you will need a cash reserve to meet the other costs of home ownership, including legal and survey fees, stamp duty and home moving costs.

In recognition of this, some lenders will give more than 100 per cent of valuation.

They may lend up to 125 per cent, for instance, enabling you to pay these bills and have money leftover to decorate and furnish your new home.

But the more you borrow, the more you’ll have to pay back, and the higher your interest bill will be in the meantime.

It’s also important to bear in mind that lenders often charge higher rates of interest for 100 per cent (and above) loans than for lower percentages

Most will also add a ‘higher lending’ charge.

So if you decide to go for this type of mortgage, make sure you shop around for the best possible deal.

To find out more, read…
100 per cent mortgages
Over 100 per cent mortgages
Higher lending fees explained.

• Get an interest-only mortgage

All mortgage lenders charge interest on the money they lend, but there are two ways of repaying the actual amount you borrow.

These are:
Repayment (also known as capital and interest) and
Interest-only…

A repayment loan is cheaper in the long run as you repay the sum borrowed – the capital – as you go along, reducing your interest bill and leaving you debt-free at the end of the mortgage term.

But an interest-only loan – where you don’t clear the capital portion of the debt until the end – is cheaper in the short term.

So if you have a deposit, but can’t afford large monthly payments, an interest-only mortgage might offer a temporary solution.

We say temporary because once your financial situation eases, you should switch to a repayment mortgage to reduce your long-term costs.

For a full explanation of the pros and cons of these mortgages, read…
Should I choose repayment or interest-only?

Interest-only mortgages

Interest-only mortgages: opportunity or trap?

And to find out about switching mortgage types, see How to change from an interest-only to a repayment mortgage.

• Get a long mortgage term

Traditionally, mortgages lasted for 25 years, but nowadays you can borrow for longer or shorter periods.

The longer your mortgage term, the longer you have to repay what you owe – meaning you pay slightly less each month.

So if you need to keep your costs low, consider asking your lender for a term of more than 25 years.

Some will allow as long as 40 years.

Don’t forget, though, that the longer your loan lasts, the more interest you will pay, so switch to a shorter term as soon as you can afford it.

For more on this, go to What mortgage term should I choose?

• Borrow more than three-times your salary

In the not too distant past, most mortgage lenders wouldn’t give you more than three or three-and-a-half times your salary.

But now – provided they consider you a good risk – many will lend four times your income, and some will go as high as five or six times.

Borrowing this much is risky though – ask yourself, for instance, how you would cope with the repayments if you lost your job or became unable to work.

And what if you needed to sell at a time when property prices were falling?

You could be left with a debt bigger than the value of your house.

To help you weigh up how much to ask from your lender, visit Should I borrow five times my income?

• Go for a fixed-rate deal

Choosing a mortgage with a fixed rate of interest, rather than one that varies, will give you certainty about your monthly costs, making it easier to budget.

But here too there are pros and cons.

For more information, read Should I go for a fix or a discount?

• A word of warning…

Several lenders offer mortgage deals specifically designed for first-time buyers.

It’s always worth considering these, but there’s no guarantee they will be cheaper than a host of other deals open to all types of borrowers.

That’s why it’s vital to enlist the help of an independent mortgage adviser to check the entire market on your behalf.

And before making your choice, be sure to consider all the costs – including the interest rate, fees and possible penalties – and all the terms and conditions.

Want to talk with a mortgage adviser who specialises in helping First Time Buyers?

We can put you in contact with a professional mortgage adviser who will find you your best mortgage. It's free and completely confidential. Simply fill out the form below


Value of Property	£
		(eg 125000)

Borrow How Much?	£
		(eg 92500)

Your Mortgage Type

First time buyer?		Yes No
Have you found property?		Yes No
Country

Sorry ! The amount you want to borrow is less than £25,000. This is the minimum allowed for a mortgage. But don't worry! You could get the money via a personal loan. I want a free no obligation loan quote Click OK No thanks. I will change my borrow amount to more than £25,000 Click Cancel

• And there’s more – plenty more

These are just the beginning of the possible solutions for first-time buyers.

Click on the links below on to learn about…

Group Mortgages and Shared Ownership

Taking a Lodger / Renting out a Room

General Solutions

Mortgage Help from The Government

Deposits for First Time Buyers

Ask The Family

Look Further Afield / Move

Use the Power of Knowledge

Graduate And Professional Mortgages

I've read enough for now and want to get a free Quick Mortgage Quote

Value of Property	£	(eg 159000)
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Country
Sorry ! The amount you want to borrow is less than £25,000. This is the minimum allowed for a mortgage. But don't worry ! You could get the money via a personal loan. I want a free no obligation loan quote Click OK No thanks. I will change my borrow amount to more than £25,000 Click Cancel
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