First time buyers

In this document:

You will want to know
Things to watch out for
Why use us?
Interested?

You will want to know

How much can I borrow?

This depends on many factors, your income being the most important, but the amount a lender will grant you is also influenced by the amount of deposit you have (if any), your current outgoings (loans, credit cards etc), your occupation (professionals tend to be allowed to borrow more) and various other factors. Most importantly, you need to be comfortable with the repayments - we can advise you on this.

How much deposit do I need?

The simple answer is that the more you have the better deal you will get. Previously (before the so called credit crunch) you did not necessarily need any deposit at all as there were various 100% mortgages available. In the past there were even schemes which allowed you to borrow more than 100% of the purchase price, allowing you to repay other debts at the time of purchasing your property. However since the 'credit crunch' or sub-prime crisis, these schemes have all but disappeared. Currently, you will need at least a 5% deposit, but 10% will get you much more choice. Start saving! The good news is you should be able to pick up a property bargain - there are some tremendous deals around at the moment, especially from developers.

Is it complicated - how will I understand everything?

Buying your first property can be daunting, which is why it is essential you seek professional help from someone who will guide you through the process and speak your language - which is what we pride ourselves on doing. All mortgage deals are now laid out in an identical fashion in what is know as a 'Key Facts' document, making it much easier to compare products and understand what you are being offered.

About the various types of mortgage

There are different ways of repaying a mortgage, basically split between what is known as repayment, ie paying off the amount you borrow gradually over the period of the loan and interest only where you only pay the interest to the lender and ideally invest in something else to eventually pay off the capital you borrowed. The 'something else' can be an endowment policy, ISA or pension plan or in many cases these days, the property itself. In other words, many people are relying on having to sell the property at the end of the term to repay the mortgage. Which method suits you depends on your own individual circumstances. However, we admit to be being biased against using methods such as endowments to provide capital repayment, preferring the advantages of repayment mortgages.

Repayment mortgages (sometimes called Capital and Interest mortgages) have certain features, namely:

The debt will reduce with each monthly payment you make although the reduction will be gradual in the early years.
As the debt reduces, the amount of capital repaid increases, thus increasing your equity in the property.
Making payments in full as they fall due guarantees the mortgage will be repaid in full at the end of the term.
Lenders tend to be more flexible about rearranging payments and altering the term where necessary.

Many clients these days opt for the 'interest only' method, which allows you just to cover the interest on the debt and not make any capital reductions. Clearly, this is not ideal as you will never pay off your borrowing. However, for those on a tight budget, it may be the only option and is arguably better than renting. We can explain the pro's and con's of both methods and which will suit you.

Things to watch out for

We will discuss all the options open to you so you can make an informed choice.

We only recommend the most suitable products for each person's individual circumstances. However, these are some of the common features you should be aware of:

Redemption penalties

We try to recommend products ideally with no penalties whatsoever, or at worst with penalties which are only as long as the offer period. ie a two year fixed rate mortgage would only tie you in for that two year period.

Fees

We try to recommend products with either no fees or very low fees. You need to be aware of some lender's 'hidden costs' such as Mortgage Indemnity Premiums which can sometimes be thousands of £s and which are added to your loan.

Compulsory insurances

Some lenders offer apparently excellent rates, but insist you take their buildings insurance*, contents insurance* or other insurance product. These are usually expensive and limiting. We try to recommend products without these 'tie ins'.

Poor service

There are some lenders we simply will not deal with because of their poor administration. Use the benefit of our experience - we will tell you how efficient your lender is likely to be.

Getting confused

There are hundreds of mortgage products on the market. Comparing them without specialist knowledge, a sophisticated software programme or hours of spare time is virtually impossible. Why not let us do it for you?

Why use us?

We will do the research for you - we have the most advanced software programmes able to search every mortgage available in the market place.

We will only recommend the best products to suit your individual circumstances.
We will endeavour to give you best advice, - it will be unbiased and in language you can understand.
We will endeavour to save you money - or tell you immediately and honestly if we cannot.
When your redemption period expires we will contact you if we feel we can switch you to a better deal.
We can arrange low cost conveyancing for you. For a personal quotation, click here.
We will add value - for example, do you know what Pre Owned Asset Tax ( POAT) is? We do and can advise you on how you can avoid it. If you are buying a property jointly and are unmarried it is highly likely you could be caught out by this tax introduced in April 2005. How many other brokers will take the trouble to advise you on this? Most will have never heard of it.

Edison Ford's M.D., John Moon, has been arranging mortgages since 1979. His knowledge of the market is unrivalled and all staff are employed on the basis they only recommend products suitable for the client's individual circumstances.

Interested?

Contact us using any of the methods on this page. Please find out your redemption penalty details before making contact as this is the first question we are likely to ask you.