Is Buying A Property A Traumatic Experience??|
by Jason Samuel
Apart from the death of someone very close or divorce the
most traumatic thing that we contend with in our lives is
moving house and if you are a first time buyer and having
to wade through the whys and wherefores of the mortgage
world it can just be too baffling and bewildering (remember
that mortgage in French actually means death guarantee!)
But take heart, moving into your first home is also one of
the most exciting and exhilarating moments of your life.
If this is your first purchase, you need to study the
market for several months so that you feel comfortable
about the location you want and the current values of the
type of property that you're looking for. Many people fall
in love with the first house they see or one that is
particularly pretty but sitting on the edge of a quarry!
Look at the location and make that your priority rather
than cosmetic things that can be changed relatively easily
and cheaply. If you are thinking about living in this house
for just a few years then think about the resale value. Try
to find something that will appreciate in value; again,
this often goes back to finding the right location.
It's also worth having a survey completed on the property.
Eventhough it can be expensive, it's much better to know
before the deal is completed and you're committed. It is
possible on some properties to have a one hundred per cent
mortgage and because competition is now so fierce it's
actually possible to negotiate a one hundred and twenty
five per cent mortgage which will give you spare money to
carpet and furnish the house. You have to be careful,
however. The chances are that the interest will be higher
and the property will have to be perfect (probably a brand
new build). You'll also be required to sign a Mortgage
Indemnity Guarantee (a MIG) which will add a percentage on
to your repayments and needs to be weighed up against the
opportunity to get onto the housing ladder.
Be clear about how much the monthly repayments will be.
Don't be swept away with the glamour of the deal. You still
need to live comfortably and pay your bills so work
strictly to you budget. If you can keep something aside for
a rainy day, you'll feel more comfortable (even if you
never have to use it). You'll have to decide what type of
mortgage is right for you. If you like to know exactly
where you are, then a fixed rate could help you. If,
however, you like to gamble, you can go for a flexible
loan. With this, you are likely to be better off at times
but you're vulnerable if the interest rate were to rise
Although it's a complete minefield you need to ask
questions and shop around for good deals because they vary
so widely. It really is worth looking at a range of
reputable lenders as it could save you thousands of pounds.
When you do eventually sign, check that there aren't
penalties if you want to move to an alternative lender
before the term finishes.
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