How to save money on your first mortgage

Feb 26

How to save money on your first mortgage

Getting a foot onto the housing ladder can be a great feeling, but it might stretch your finances to the limit. The chances are, your biggest expense once you settle into your new property will be your mortgage, so it’s important that you find the best possible deal. This brief guide offers some useful suggestions to help you save money on your first home loan.

Choose the right property

First and foremost, you’ll need to choose a property that not only suits your needs and preferences, but that also falls within your budget. Some serious self-restraint is required here. You might fall head over heels for more expensive homes, but always consider the impact that buying these abodes will have on your day-to-day finances. The fact is, the cheaper the property you purchase, the lower your mortgage repayments will be. Luckily, there is plenty of choice on the market right now. Estates agents like Living Residential are marketing an array of homes and should have houses or flats that are ideal for you.

Put down the largest possible deposit

Choose the right property

CC image credit to Alan Cleaver

If you are looking for conveyancing helps, then we recommend Edward Hands & Lewis who helped with our house move. It’s now possible to buy properties even if your deposit is as low as 5%, but you’ll end up paying higher interest rates if you take this approach. Bear in mind that the larger your deposit, the better deals mortgage providers will offer you. The most competitive rates are available for buyers who have deposits of 40% or more. This might not be a realistic prospect for you, but it’s worth trying to scrape together as large a sum as possible.

Note that the same deposit will represent a greater percentage on a cheaper home, and this is well worth considering when you’re scouring the market for the perfect pad.

Shop around

Shop around

CC image credit to woodleywonderworks

Just as you would with any other type of financial product, it’s important to shop around when you’re seeking a home loan. Lenders’ rates can vary considerably, and by spending some time perusing your options, you stand to save yourself a tidy sum. Bear in mind that as well as the headline interest rate, it’s important to pay attention to variables like set-up costs and early repayment charges.

If you feel a little lost when it comes to searching the market, you can enlist the help of a mortgage broker. These specialists can research the market for you and guide you through the application process.

Try not to add set-up fees to your mortgage total

If your mortgage deal has an arrangement fee, you might be tempted to add this sum to your mortgage total in order to ease your immediate financial pressures. However, if you can, it’s better to cover this cost up front. This way, you won’t end up paying interest on the fee.

Getting your first mortgage will always be a major financial commitment and it could have a big impact on your lifestyle. However, by following tips like these, you can ease the pressure and make potentially sizeable long-term savings.