Buying your first home can be a daunting experience for many. But with the right advice and guidance, it can also be a fun and exciting time, signalling the start of new adventures for you and your family. That’s where we come in.
It doesn’t matter if you don’t know the terminology of mortgage lending or have no insight into the property buying process. We’ll explain everything and guide you through it.
With Smart Mortgages you are not alone. We will find you the best mortgage deal for your circumstances, explain the options available to you as a first-time buyer and assist you at every stage of the journey.
Moving home is a really exciting time. There are a lot of fun parts you get to enjoy – such as viewing houses, exploring local areas, choosing new furnishings – but these are sometimes overshadowed by the more stressful parts, like arranging a mortgage.
Smart Mortgages are independent broker who can access to the entire lending market. We not only provide mortgage advice for moving home, we manage your entire property-buying journey so you can enjoy this experience – like you’re supposed to.
Remortgaging is where you take out a new mortgage with a new lender on a property you already own and have a mortgage on. The new mortgage takes the place of the mortgage you originally had on the property.
You may want to remortgage if:
The introductory deal on your current mortgage is due to end soon and you’d like to avoid being transferred onto your lender’s SVR (standard variable rate)
You want to consolidate multiple other debts
You need money to fund home improvements
You have a large expense coming up – like a wedding or school fees, or you want to help your children with a deposit, etc.
Remortgaging may be unsuitable for you if:
You need a small mortgage below £25,000
You need to borrow a very high percentage of your property’s value
You took out your current mortgage very recently
Your mortgage has high ERCs (early repayment charges)
A buy-to-let mortgage is a type of mortgage designed specifically for properties that are purchased with the goal of renting them out.
They can be set up on an interest only basis, meaning you only repay the monthly interest payments each month, not the outstanding loan balance, which doesn’t actually reduce during the lifetime of the mortgage. This is paid back at the end of the mortgage, typically with the sale of the property.
To rent out an existing property without breaching your mortgage agreement you’ll have to either obtain permission from your existing lender or move over to a buy-to-let mortgage product. If you are considering a buy-to-let arrangement, please get in touch.
A ‘New Build’ is a property that has been built, converted or refurbished within the last two years. This includes properties being bought off-plan and those that have been occupied or rented, but are still in the ownership of the builder or developer. We can help you through the entire process of buying a new build property and have excellent working relationship with many of the local property developers, meaning we already are aware of how to structure and plan mortgages for new schemes near you.
We also offer a expert support for other specialists and niche mortgages, including:
Commercial Mortgages (not regulated by FCA)
Freelance and Employed Mortgages
Bridging Loans (not regulated by FCA)
Development Finance (not regulated by FCA)
Interest Only Mortgages
Mortgages for Directors
Make the Smart Move and give us a call on 028 7131 1103 to start your journey home.
A mortgage is a loan you take out with a lender for a number of years
The length of time over which you have a mortgage is called your “mortgage term”
Mortgage terms can be anywhere between 5 and 40 years
A mortgage is a type of secured loan, which means it’s secured against a property – usually the property you want to buy with the mortgage
Using a property as security for a loan means that the lender can repossess it if you don’t keep up the mortgage payments
To take out mortgage, you must put down a mortgage deposit of at least 5% of the purchase price – the mortgage itself makes up the rest
Interest Rates Explained
When you take out a mortgage, you’re given an introductory interest rate for the first few years – typically between 2 – 5 years
A popular kind of interest rate for first-time buyer mortgages is a fixed rate, which is where interest is charged at a set rate for a certain period. Fixed rates are particularly good for those who like to budget
After the introductory period ends, you’re transferred onto your lender’s SVR (standard variable rate), which is the interest rate they set themselves.
This is typically higher than the introductory rate, so you would often remortgage onto a new product with a new lender when your introductory deal ends or take a new product with your existing lender
Paying Back Your Mortgage
You pay back your mortgage with interest
There are 2 main types of mortgage which determine how you pay the lender – repayment and interest-only:
With a repayment mortgage, you pay back a bit of the outstanding mortgage balance – i.e. the amount you borrowed – each month alongside interest payments
With an interest-only mortgage, you only make interest payments each month and repay the full mortgage at the end of the mortgage term
The typical mortgage process.
1. Chat with a Smart Mortgage advisor
You can either arrange a phone appointment, a zoom call or a face-to-face meeting with us (in our socially distanced outdoor meeting space). We will ask you some questions to determine your feasibility and affordability, before doing some research to find the best deal for you now and in the future. (We’ll arrange a follow up thereafter.)
2. Get a 'Decision In Principle'
Once you’re happy with your advisor’s recommendation, we’ll go to work securing your Decision in Principle. This is basically a pledge from the lender that they’ll borrow you money you need to purchase the property provided that the information you’ve provided is accurate (and subject to a valuation of the property)
3. Place offer on property
After you’ve got your ‘Decision in Principle’, you’ll be in an excellent position to make an offer on a property you like because as you can show a seller you can afford the purchase and are serious about buying. (This is the fun part)
4. Mortgage Application and Submission
After a seller accepts your offer, we’ll ask you to gather up all the documents we will need to send to the lender. We’ll check over everything and be in contact with both you and the lender throughout until we have everything we need firmly in place. Once we’re happy, we’ll submit the final mortgage application for you.
5. Underwriting & Valuation
The lender will verify that the information you’ve provided is correct and assess all your documents for themselves. They’ll also ask for a property valuation to make sure the property hasn’t got any significant issues and is inline with the purchase price.
6. Receive Mortgage Offer
If your lender is happy with everything, they’ll send you your mortgage offer.
When you’ve accepted a mortgage offer, you’ll go through a legal process referred to as conveyancing. This involves solicitors drawing up contracts and handling the actual purchase of a property. You’ll also need to arrange buildings insurance before progressing to exchange & completion.
8. Exchange & Completion
Once everything is in order, your solicitor will exchange contracts with the seller’s solicitor. You’ll be asked to pay your deposit, at which point you are legally bound to purchase the property. (You’ll forfeit the deposit if you pull out after exchange.) The property purchase completes when money is transferred on an agreed-upon date.
Search the market.
Make the Smart Move and give us a call on 028 7131 1103 to start your journey home.
It’ll be a lot harder to get a mortgage as a first-time buyer with no credit or a bad credit history unless you have a large deposit. There are ways you can improve your credit score and overall profile though.
How do I improve my credit score?
Pay all bills on time – the lender needs to make sure you’re going to make your mortgage repayments and a history of late or missed bill payments indicates unreliability
Put all credit commitments onto direct debt as opposed to ad hoc payments – a history of direct debits that were taken on time highlights financial stability
Don’t use all available credit – i.e. don’t max out your credit cards as this suggests you push your finances to the limit
Register on the electoral roll – sometimes called the “voters roll”. Try to be registered on the electoral roll for at least 3 years before you apply for a mortgage as this makes it easier for lenders to trace your recent address history
Don’t use payday loans – the need to take out a payday loan indicates financial instability
Always pay rent on time – if you miss rent payments, you risk your landlord taking out a CCJ (county court judgement) which greatly reduces your chances of having a mortgage application approved
How much will I need for a deposit?
There are no 100% mortgage products on the market anymore. You’ll typically need somewhere between 10% and 20% of the value of a property to purchase it. There are some 95% mortgage products that surface on the market (meaning you only need a 5% deposit), but they are not consistently available. Speak to us to assess your affordability.
Can I rent the house out after I buy it?
You can only legally rent a property to which the mortgage product allows letting out of the property. Normal mortgages are designed for the person who intends to live in the house. We will need what’s known as a ‘Buy-To-Let’ mortgage, which we can help secure for you and guide you through,
What insurances will I need?
If you move home you’ll have new home insurance requirements. We can help you find the most suitable deal for your new home and can also help you organise life insurance and other types of protection.
What other charges or financial outlay is involved in buying a home?
There are several upfront costs in involved in buying a house that you should be aware of. These include:
Your deposit (Typically 10-20% of the property value)
Valuation fee (£150 to £1,500 depending on property value)
Surveyors Fee (£200-£600)
Legal Fees (£850-£1,500 inc VAT)
Estate Agent Fees (only paid by the seller, at around 1-3%)
Moving/Removal Costs (or you can rent a van yourself!)
Can I get a mortgage if I'm over 60?
Yes! There are several later life lending options. Speak to us and we’ll advise you what the criteria are and if you qualify
Should I get a 5, 10 or 20 year mortgage?
There are a few different factors that determine which mortgage term you should choose.
Why you’re moving
How long you plan to live in the property
What you can afford in monthly repayments
The amount you want to borrow
When you are looking to retire
Any expected future financial changes
We’ll guide you through the options and find you the mortgage that best suits you.
What does fixed rate mean?
On a fixed rate mortgage the interest rate you pay will stay the same throughout the length of the deal no matter what happens to interest rates.
What does variable rate mean?
A variable interest rate is an interest rate on a loan or security that fluctuates over time because it is based on an underlying banking interest rate that changes periodically. With variable rate mortgages, the interest rate can change at any time.