Lenders are keen to attract first-time buyers and many offer them special deals. As a first-timer you may be offered a larger income multiple than is normally available from your chosen lender, or a higher loan to value (LTV).
Other lenders will pay your valuation fee or your legal costs, or waive the higher lending charge (HLC). Make sure you understand the terms and conditions of these offers, and any additional costs you might incur for taking a mortgage with these features. Sometimes these incentives go hand in hand with a higher interest rate. If you want to check your eligibility for a mortgage before you start homebuying you can ask a lender for an agreement in principle. This is based on details you provide about your income and a credit check. You are under no obligation to take a mortgage from the same lender, but you should bear in mind that every credit check will leave a footprint on your credit file and too many footprints may put a lender off agreeing a loan. Some people believe having an agreement in principle makes you look more serious about buying a home and in fast-moving markets a seller may favour an offer from a buyer who has one. Usually, though, the fact you don’t have to sell a home and are not in a chain is more important to a seller.
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Date: 1st, April, 2006 |
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