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Is Buying A Property A Traumatic Experience?? by Jason Samuel http://www.awisemortgage.com To take on a mortgage (in French meaning death guarantee!) you need to be of stout heart and mind. Moving house and particularly moving onto the property ladder for the first time is an exceedingly traumatic event in anyone's life. The paperwork can be overwhelming, the terms and figures can be baffling and it's quite possible to over burden yourself with debt. But once you feel that you're a home owner it all becomes worthwhile and you can start building a future for yourself. The first decision is whether you can afford the house you've set your heart on and what type of mortgage is best for you. The most important thing is to decide a budget and stick to it. Although it's not easy, it's best if you can not become too emotionally involved with the house! Many of us see a property, fall in love with it and push ourselves to the absolute limit and beyond to achieve the purchase. Prepare a down payment. Remember that the more you can save, the less you'll have to pay back. To feel comfortable it's good if you can have a ten per cent deposit plus a little more to cover your lawyer's fees and taxes. Try to use this time of research to save for your deposit. Most lenders like you to have ten per cent of the value of the property but remember that you will have other overheads; a survey is expensive but can literally save your skin, in addition, there will be stamp duty and lawyer's fees that you need to budget for. On some new properties the competition is so fierce that builders are offering to organise mortgages of one hundred or even one hundred and twenty five per cent (the extra is to carpet and furnish the house). With the chance of living in a brand new house with everything in it brand new also it can be very, very tempting but remember that these lenders are not your friends and they are just doing this to make money out of you. You'll find that you're paying considerably more interest and you'll also have to sign a Mortgage Indemnity Guarantee (a MIG) which will be a quite a financial commitment for you. Depending on your circumstances, these deals can be good but the major thing to consider is whether you are likely to make a healthy profit when you sell. Make sure that the monthly repayments are clearly explained to you and that you feel comfortable that you can live on what you have left after your repayments. You'll have all the day to day bills; rates, electricity, gas, phone, water etc. and these are sometimes swept under the carpet by companies who are desperate for you to buy their properties. You'll be given the choice of either a fixed term or a flexible mortgage. A fixed term will probably charge you a slightly higher interest rate but you know that this will be your repayment for the length of the fixed term. With a flexible loan you could well start off with a good deal, but, depending on where the markets go, you could be left vulnerable. Look around and ask lots of questions. There are so many companies offering so many deals that sometimes it can be too much to take in, but try. A good deal could save you thousands and thousands of pounds. In addition, find out if there are penalties if you decide to change to an alternative lender before the term finishes. |