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Being a first time buyer is daunting. Not only do you have to learn all about mortgages, how they work and all the complicated language that they involve, you’re also now wondering: How do I get a good mortgage deal? 

Here are some of our top tips to helping you understand mortgage deals, and how to find the best deal for you. 

Before we get into the tips, it’s possible that you might even be asking yourself: ‘what exactly is a mortgage deal?’ 

A mortgage deal is an agreement that is made with a lender. It covers the rate of interest paid by the borrower, and also how long this rate gets paid for. A deal doesn’t last the whole period of your mortgage, usually, they last between two and five years. After this deal expires, your repayments then become calculated by the standard variable rate of interest. 

How do I get the right mortgage deal? And why is getting the right mortgage deal so important? 

Mortgage deals are not a ‘one size fits all’ situation. Getting the right mortgage deal depends on a number of factors, including your attitude to risk, your credit score and your personal circumstances. Getting a good deal is important for house buyers as it can save you a lot of money down the line. 

Being in a good financial situation when buying your first house will stand you in good stead, as having a large first time buyer mortgage deposit will mean you have a bigger range of deals to choose from. Saving money is an important good start.

Having a good credit score is also important, as lenders will use this to determine how much risk you pose as a mortgage borrower. If you want to improve your credit score before considering a first time buyer mortgage, read these tips. 

However, your choices will be more limited if you don’t have a big deposit, or if you don’t want to pay a large arrangement fee. Learn more about arrangement fees for first time buyers here.

Usually, to qualify for the best deals, you will need a great application and a significant deposit. Online you can find many tips on how to make a good application 

Now let’s get into our seven top tips! 

Tip 1) Know what types of deals are available to you, and the interest rates involved.

Make sure you compare the different types of mortgage deals for a first time buyer before taking any risks. The interest rates of a mortgage deal are incredibly important, as they determine how much you’ll pay in the long term. Mortgage deals are usually categorised by how their interest rates function.

 For example, a fixed rate deal is what is usually recommended for first-time buyers. With a fixed rate mortgage, you know how much interest you’ll be paying for the deal period, which is why it is an attractive option for first time house buyers. 

But, as always, there are some cons to fixed rate deals. If mortgage rates fall, you’re stuck paying the same interest. Find out more about fixed rate mortgages here.  

Some of the other deals which are more attractive to buyers wanting to remortgage include tracker, discounted, variable and offset. Check out this guide on mortgage types to learn more. 

If you’re worried about the possibility of negative interest rates and the impact of COVID on interest, read our blog post which will hopefully ease any of your worries! 

Tip 2) Talk to a mortgage advisor! 

As a first time buyer, you’re probably overwhelmed with the amount of information you need to read and consider when trying to find the best mortgage deal.  A broker can explain all of the best options for you, and give you mortgage advice from a completely unbiased view. They will help you find the deal that suits your circumstances best, which will then also make your mortgage application become more likely to be accepted! Mortgage brokers can also advise you on the Help to Buy scheme, and other alternative government schemes for first time home buyers. 

If you’re stuck for questions to ask a mortgage broker, or are wondering if you should use one, read this blog post. 

Tip 3) Make sure you are well aware of all of your options, as there are MANY!

There are so many different mortgage options out there, which is overwhelming in itself. Make sure you do your research, and please don’t just settle for the cheapest option! If you’re wanting to get a great mortgage deal, you need to make sure you know what’s right for you, and compare the different rates and fees that you might be charged with potential deals.

 Use this tool to compare different mortgage deals available to you. 

Tip 4) Always check your paperwork! 

Check everything. And if you think you think checking once is enough, check again! 

Tip 5) Be well aware of the different types of fees. 

You also need to consider arrangement fees, valuation fees and legal fees when comparing mortgage deals. These are generally fees you have to pay before your mortgage starts. 

Tip 6) Watch out for any extra costs 

Getting your first mortgage will probably be the first time you ever think about life insurance, but as we said earlier, don’t rush into choosing the first option that you find! 

Also be careful of any extra costs, such as building insurance, content insurance that you can be persuaded into by your lender. Read this home insurance guide to become fully aware of the costs and deals available to you.  

Early repayment charges can also catch you out if you move house or switch deals during the introductory deal period. Sometimes a tracker or discount deal can be the better option if you want to make sure you avoid these charges. 

Tip 7) Customer service is also important

Consider reading mortgage lender reviews. Not only do you want a lender who will find you a fantastic deal, but you want one who will regularly contact you and keep you up to speed with any new developments. 

Got any more questions about mortgage deals? Get in touch. 

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