Mortgages Help

How to get the right mortgage for your new home

For most people, obtaining a mortgage is one of the most important stages in the house-buying process.

Obtaining the right mortgage product, at rates which work for you over the long term, can make all the difference in securing your dream home.

As with most aspects of buying a house, the more advance planning you do, the better a position you will be in to proceed when the time is right.

Whether you’re a first-time buyer, or are trading up to your second, or third home, the key principles are the same.

First-time buyers

As a first time-buyer there are three things you need to ask yourself before you start trying to secure a mortgage:

  1. How much can I borrow?
  2. How much deposit will I need?
  3. Will I be able to afford the monthly repayments?

Although you don’t want to start falling in love with houses years before you’re ready to buy, it’s good to get a feel for the local market, and what different types of properties are going for, to give you an idea how much you will need to save or borrow.

Mortgages typically require deposits of between 10-35% of the value of the loan, so a larger deposit may help make up for a lower income. Regardless of income level, the loan level will need to be in line with your outgoings so you will still need to be able to prove that you can afford the monthly payments.

Skipton International’s mortgage calculator, which can be found under Guernsey Mortgages or Jersey Mortgages, is a good starting point for working out how much you can borrow. By answering a few straightforward questions, the calculator will give an estimate of how much Skipton International will potentially be able to offer you for a mortgage. It can also give you an idea of monthly repayment costs using available mortgage products.

The next stage is to investigate mortgage products, to familiarise yourself with the different rates on offer, and to work out whether you will go for a fixed rate mortgage or a variable rate. Fixed rate mortgages tend to be for three or five years. Knowing what you will be paying each month makes budgeting easier, and you don’t have to worry about interest rates rising in the first few years of property ownership.

When working out your budget, be sure to factor in legal fees, surveying costs, mortgage fees, and plan to have a contingency fund for any unforeseen costs.

Be realistic in your choice of property. Think about the maintenance costs before committing to a purchase. Older homes may require higher levels of maintenance than new properties, and flats may come with higher communal charges, especially if facilities are extensive.

Before applying for a mortgage, make sure your credit card liabilities and catalogue payments are up to date, and put direct debits in place for smaller liabilities to ensure monthly payments are met.

Be realistic about your outgoings and what you will expect to spend in the future. Complete a budget planner so you’re fully aware what you’re spending.

Regardless of the home you go for, and the mortgage you decide upon, don’t overstretch yourself. Circumstances may change, but life goes on.

 

  • Second/Third Time Buyers

    When moving into your second, or third home, many of the the same points apply. You will have a better idea about your deposit – generally the equity from your existing home, and you should be in a better position to know how much money you can afford to spend on a mortgage each month.

    The main sort of questions you need to consider now are whether you can transfer (port) your mortgage; whether you can borrow an additional amount to buy a more expensive property, and, whether you can make overpayments should your salary levels rise or if you acquire other funds?

    If Skipton International is in receipt of all the necessary and appropriate information, a decision in principle on a mortgage will be given within 48 hours. Skipton will typically need to know what existing costs or liabilities, such as loan repayments, hire purchase repayments, credit card debits, school fees, or maintenance payments, are outstanding.

  • Into retirement mortgage

    Skipton offers mortgages that run into retirement age, as follows:

    • For Jersey/Guernsey residential mortgages, the maximum age at end of term is up to a maximum of 70.
    • For UK Buy-To-Let mortgages – the maximum age we will accept applications is 69, with age 84 at end of term.
  • 100% Mortgages

    One way of overcoming the need for saving a large deposit is with help from your family and loved ones. Skipton’s 100% mortgage allows your family member to secure the equivalent amount of deposit needed on their own property (this is called a second charge), thereby gifting the deposit to you, and negating the requirement for you to find the money. Your parents or family member will sign documentation for the second charge, using some of the equity they may have acquired on their own home over the years.

    As with the guidance above, make sure your credit card liabilities and catalogue payments are up to date, and put direct debits in place for smaller liabilities to ensure monthly payments are met.

    Be realistic about your outgoings and what you will expect to spend in the future. Complete a budget planner so you’re fully aware of what you’re spending.