I understand little of the banking system and even less about mortgages. I am in the scarey property market place for the first time. I rang up a mortgage lender and they sent me a ‘Key facts illustration’ I rang them 3 days after receiving it to apply for a mortgage and they told me that that particular mortgage (10 year fixed) had been withdrwn two days ago.

Whats going on at the moment and what should I do ?

I agree with your other answers and think you should bide your time and you might be in for a real bargain. It is unfortunate for some but beneficial to others, this is the economy as we have known to love and hate!

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The prospect of buying a home for the first time can be a very exciting experience, however for many it can also be a very daunting one too.

Being able to put down a deposit significant enough to secure a mortgage remains the biggest up hill struggle for most first time buyers. The fact is that the bigger your available deposit, the wider your selection of mortgage products will be.

Traditionally the average first time buyer would have had to be able to put down a 10% deposit – in some areas of the country, this could mean well over 10,000 for an average house price!

Understandably, finding that sort of money is going to be tough for most would be borrowers and in recent times lenders have recognised this problem and have sought to look for alternative measures – it is now possible, depending on your credit record, to secure a 100 percent loan to the value of the property.

It is advisable in most cases however to provide some form of deposit as there is a danger of being in negative equity should prices fall sharply. Without a deposit, the lender will also view you as a higher lending risk which could result in your mortgage interest rate being less competitive.

As tempting as it may be, taking out a loan elsewhere to pay for a deposit should be avoided. When making your mortgage application you will be obliged to declare all other outgoings and monthly expenditure – this may reduce the amount of borrowing you are eligible for.

Mortgage Affordability

Banks and building societies have traditionally used income multiples as a way of assessing how much an individual is eligible to borrow. Unfortunately, the force of the housing market can often leave such calculations looking extremely outdated – since the recent housing boom, this calculation can produce an affordability gap as house prices have risen far beyond the traditional calculations.

Banks and building societies have had to move with the times, although some might say slowly at times – many will now let you borrow on your ability to pay which can sometimes allow applicants to borrow a little more.

The type of mortgage product you select can also have a bearing on the level of borrowing you may take out; for example, if you chose a five or ten year fixed rate mortgage, the lender may be prepared to lend you a little more because the monthly repayments stay the same for a long time, which on the whole is easier for a borrower to budget their outgoings.

Mortgage Fees

There are many different fees to account for when buying a property, whether you are a first time buyer or second time buyer. Stamp duty is a government tax which is calculated as a percentage depending on the purchase price of your property.

Other fees may include; mortgage valuation and building survey costs, solicitor fees, lender arrangement fees and estate agent fees. It is very common to overlook these costs when scraping around for a deposit to put down.

Some lenders will even charge you a fee known as a higher lending charge – this charge is usually applied where a borrower is looking to borrow over 75% loan to value. The higher lending charge is applied to protect the lender in the event of mortgage shortfall however, the cost is covered by the borrower.

James Copper
http://www.articlesbase.com/non-fiction-articles/mortgages-a-guide-for-first-time-buyers-119366.html

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The time has come for you to buy a house, but for a first time buyer, the housing market can be frightening and confusing. Unethical lenders may try to ensnare you with high interest rates and a loan that will have you paying for years. Many houses are priced out of the range affordable by first time buyers. The market for mortgage loans fluctuates every year, the interest rates rising and falling without apparent rhyme or reason. All these things make finding a good deal on a house difficult.

A first time buyer should consider a number of factors before going to purchase a property, such as how much they will be permitted to borrow, how much they can afford to pay per month, the initial cash outlay for fees and deposit, and what kind of mortgage they ought to use. A mortgage broker, who will act as an intermediary to find you the right mortgage, can help immensely to ease this process.

It can be dangerous to borrow too much money to buy a house, no matter how tempting the idea of home ownership is. The problem of negative equity is when your mortgage is worth more than your house, is still a danger. Many first time buyers consider only the monthly payment when they sign up for a mortgage. It also is important to look closely at the full amount you will be paying, and the length of time it will take to repay. Some kind of deposit is normally required, as well. Though there are a few lender who will offer a mortgage for 100% of the price of your house, these are rare, and will ensure a long payment process. It is best to have at least 5% of the purchase price. If you have 10% or more, you can secure a better deal on your mortgage.

There are many different types of mortgage that can be chosen. These include the fixed rate mortgage – with an unvarying interest rate over the life of the loan, the adjustable rate mortgage is one where the interest rate is periodically adjusted based on a index, and the interest-only loan is where for a period of time, the buyer pays only the interest on the loan, then must begin making payments on the principal. These last two types can be tempting to the first time buyer with little income, but can result in more money paid out over the lifetime of the mortgage. An adjustable rate mortgage can be the better deal if interest rates continue to fall, but worse if they rise. Interest only loans permit a buyer who will be in better financial shape in a few years to get a foothold in the housing market. The downside is that the principal will be untouched for those years.

With careful planning and consideration, the housing market need not be frightening or daunting to the first time buyer. All that is needed is a good assessment of your needs and situation.

Derek Both
http://www.articlesbase.com/non-fiction-articles/what-you-need-to-know-about-uk-mortgages-as-a-first-time-buyer-107476.html

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I am looking for some personal experience from the first time buyer.
Where is the best place to get mortgages loan?

Is there a federal mortgage loan?
I am looking to buy in the next few months and I need some one to guide me on loan and everything about home buying for the first time.

There are no "first time home buyer" loans as such. There are loans available from FHA, VA and the USDA which don’t require as a big of a downpayment as a conventional loan. For example, the FHA only requires 3.5% down as compared to a conventional which wants 10%.

If you’re looking in a few months for a house, start saving for a downpayment NOW. The more you can put down, the lower your mortgage payments will be. If you can put 20% down, you don’t pay private mortgage insurance (PMI). Also, pull your credit reports from the 3 credit rating agencies. If there are any errors, get them cleaned up.

When you’re ready, get pre-approved for a mortgage. This will require the lender pulling your credit report, checking your last two years tax returns, last two months bank and investment statements and a month’s worth of paystubs. If you are approved, they will give you a letter with your approved amount. This way you don’t look at houses out of your price range.

Next, get a buyer’s agent. This is a realtor that works on YOUR behalf. Ask other people you know who have bought houses recently to see who they use and if they’d recommend them. They will show you houses in your price range with features you’re looking for. When you find the house you want, they will help you write the purchase agreement and make the offer. They will negotiate with the seller’s agent and help make you stay on schedule with items that need to be taken care of when buying a house. You don’t pay anything out of pocket for them as they split the commission with the seller’s agent.

When the seller accepts and signs the purchase agreement, go back to the lender who gave the pre-approval and officially apply for a mortgage. They will have the property appraised and if the sell price is less than the appraised price, they should approve the loan.

Also, you need to contact your insurance company and get homeowner’s insurance for the property. Mortgage lenders require this.

One thing you will want to do is get a home inspection. Your buyer’s agent should be able to recommend some home inspectors to you. They will go through the house inside and out and tell you of potential problems and things that will require maintenance.

If everything checks out, then all you’d have to do is sign the papers, get the keys and officially become a homeowner.

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Buying your first home can be a very exciting time. Getting on the property ladder and gaining your independence can be a hugely fulfilling experience. However before you reach this stage it is likely you will have to overcome many challenges including saving a deposit, finding a suitable property, paying a range of legal fees and securing the right mortgage.

Arranging your first mortgage can be very daunting with a mind-boggling number of products available and lots of jargon and legal processes to be understood. A house is likely to be the single biggest purchase you ever make so ensuring you compare mortgages to find the right one is vital.

The first step is to work out how much you can afford to borrow. This is dependant on a number of factors including your income, your credit history and the value of your deposit. Mortgage products are available for up to 125% of the purchase price, but typically a 5-10% deposit is required. Saving up a larger deposit could allow you to secure a more competitive mortgage rate. On average a £100,000 mortgage at 5.5% over 25 years would result in monthly repayments of around £620.

Once you know how large a mortgage you are likely to qualify for the next step is to compare the market to find mortgages most appropriate to you. At this stage you will also want to start looking for suitable properties in your price range. There is little point approaching a lender for a mortgage if there isn’t a property you like in your price-range. However, if you can find properties you like, it is advisable to have a confirmed ’agreement in principle’ in place from a lender before making an offer as this proves you are a serious buyer

There are many mortgage products out there so visiting the internet and using a mortgage calculator will mean you can compare products more quickly. When searching the market you will find a range of mortgage products on offer. These include fixed, tracker, capped and discounted rates. Fixed rate mortgages are a popular choice with first time buyers as they allow you to budget your expenditure with a greater degree of certainty.

When deciding which mortgage product is right for you there are several factors to consider. Firstly is the rate competitive? The best way to determine this is to use an on-line mortgage comparative site that will allow you to compare all the products in the market. Secondly is the rate likely to increase? Tracker and discount rates may appear more attractive than a fixed rate but could you afford the additional repayments if interest rates were to increase? In addition to these factors it is important to consider the fees that will be applicable to your mortgage. These can include a valuation fee, a booking fee and an arrangement fee. In addition to stamp duty these fees can have a significant impact on the affordability of your mortgage.

Once you have found a suitable mortgage you have the option of either contacting the provider directly, or, if you feel more guidance is required you can contact a financial advisor who will speak with you about your requirements and help you arrange a suitable mortgage. The mortgage market can be a confusing place and the best action to take if you are unsure is to take professional advice. Choosing the wrong product can be a very costly mistake.

Peter Ecob
http://www.articlesbase.com/mortgage-articles/a-guide-to-first-time-buyer-mortgages-119513.html

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