Mortgage advice for first time home buyers

A mortgages is a long term financial obligation (15 to 30 years) that impacts heavily on an individual’s personal budget.

Taking a mortgage, especially for first time home buyers, requires you to seek expert advice and to make careful consideration of the following aspects that can influence the cost of the mortgage.

1.) Cost and fees
The amount of money you pay as mortgage fees, including arrangement, valuation and exit fees, can add a substantial amount of money to your mortgage. Different mortgage financiers charge different fees and its advisable to shop around for the best deal.

2.) Down payment
A down payment helps to minimise the cost of a mortgage for the length of the financing term. This is because by putting a down payment you actually reduce the amount of the loan. In most cases putting a 20% down payment exempts you from purchasing private mortgage insurance to protect the financier against your default.

3.) Interest rate
Interest rate determines the amount of money you have to pay each month. It is recommendable to consider “lock-in” fees to guarantee yourself the best deal should the interests rise in the market.

4.) Negotiation skills
The overall mortgage cost depends on your negotiation skills. Talk to several mortgage financiers and find all the necessary information regarding mortgage costs and fees. Use this information to negotiate for better rates between the financiers. This will help you get the best mortgage terms.

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