Starting out on a mortgage journey can feel intimidating. We’ve been there. It can feel like the rest of your life gets put on hold when you’re buying your first home. If you’re considering applying for a mortgage, here’s some helpful advice from our team to help you understand your mortgage availability.
Let’s look at the key questions together:
How Much Can I Borrow?
There’s plenty to think about when it comes down to how much you can borrow. But don’t worry, it’s not just about your income:
Expenses, credit history or how much you have saved for a deposit all are factors too. Taking these into account, we’ll help you calculate a realistic budget.
Our experienced mortgage advisors can offer you tailored advice to ensure your dreams are in reach without straining your finances. For personalised advice, please feel free to email us at enquiries@keymortgageadvice.co.uk to discuss a free consultation.
What Mortgages Are Available?
We understand that not one size fits all – the good news is, there are mortgage options available for everyone, and finding the right fit for you can be a game-changer. From variable rates, fixed rates, repayment plans to interest-to-value (ITV) or interest-only loans, we can guide you to a mortgage that keeps your payments manageable.
What Mortgage Can I Afford?
Typically speaking, when applying for a mortgage in principle, lenders estimate how much you can borrow based on your annual income. They usually calculate your salary x 4.2.
For example:
For a salary of £30,000. You would be able to borrow £126,000.
Our online mortgage affordability calculator is a quick and easy estimate of what your monthly mortgage payments might look like.
Of course, there can be roadblocks on the way to finding the ideal mortgage for you, but every decision you make with Key Mortgage Advice will be backed by years of experience. Some added costs to consider may include:
- Solicitor fees
- Property surveys
- Insurance
Here at Key Mortgage Advice, we hate surprises. It’s easy to be caught off guard if you aren’t prepared. Getting a mortgage goes beyond just viewing house prices. This is where things can start to feel overwhelming – but it doesn’t have to be that way. We can help you get a clear picture of your realistic budget, so you can focus on building your future.
How Much Deposit Do I Need For A Mortgage?
Your house deposit is an important step in your home-owning journey.The general amount you need for a deposit typically depends on the price of your property and your personal budget.
For example:
A lender may ask for a 10% deposit for a property with a value of £200,000. This would result in a deposit of £20,000.
There are options available, such as a 95% mortgage. This mortgage is ideal for first time buyers or home movers. It’s typically expected that you’ll need 5%-9% of your chosen property price for this mortgage.
For example:
For a mortgage of 5%. A £300,000 home would need a deposit of at least £15,000.
There are ways you can benefit from the amount of deposit you offer. A higher deposit, such as 10%, 15% and 20%, can lead to bigger mortgage rates and smaller monthly repayments. This may all sound intense but our expert team specialise in making the confusing stuff simple. A second benefit of a higher deposit would include a lower loan-to-value (LTV) ratio.
Understanding The Loan-to-value (LTV) Ratio
The loan-to-value (LTV) ratio is the percentage of the property’s value that a buyer is loaning. The lower the loan-to-value (LTV), the more favourable it is to lenders.
The bottom line is don’t worry if you’re not quite there yet. Whether you’re starting with a 5% deposit or more, we’re here to make this process as smooth and stress-free as possible.
How Can I Save For A Mortgage Deposit?
Saving for a mortgage deposit isn’t always easy, however it is essential. For many first time buyers, navigating how to save for a mortgage deposit will help you learn what mortgage you can afford. Some ways you can save for a mortgage and navigate mortgage affordability can include:
- Setting clear saving goals.
By speaking to an advisor with us at Key Mortgage Advice, we can help you grasp what mortgage you can realistically afford. You can get in touch using our contact page for a free consultation.
- Open the correct savings account.
Our expert advisors can guide you through the various types of savings accounts available. We can help you understand how each option fits in with your home-buying goals, so you can make confident and informed decisions with your savings
- Practice pro budgeting.
Our mortgage advisors at Key Mortgage Advice offer personalised financial guidance.
In Conclusion
Buying your first home doesn’t have to be overwhelming. We’re here to help simplify every step of the way. From understanding how much you can borrow, exploring mortgage types, calculating how much you can afford and saving for a deposit. With expert advice and personalised support, we’ll help you make informed decisions on your journey to home ownership.
What Next?
We are aware that no two customers’ paths are the same. We can work around your schedule and we are transparent about all of our fees and our advisors are ready to guide you through each step of the way. We operate across the North West in Preston, Southport and Garstang. To book a free consultation, give us a call at our Southport branch (01704 829888).
