Buying a new home is one of life’s most exciting milestones, but it can seem daunting due to the overload of information, especially if you are a first-time buyer looking to step onto the property ladder. Although the property market can be tricky to navigate, buying a new build home could be a fantastic option - in fact, with plenty of help to make your move possible across all L&G developments, securing your dream home could be easier than you think.
Mortgages can be one element of a move that seems complicated, so to answer all your mortgage-related questions, we’ve partnered with CIB Financial Management to create a series of blogs and useful videos which will simplify topics such as affordability, incentives like Part Exchange and why you should consider buying new.
Adam Carpenter, an Independent Financial Advisor, breaks down these important topics and offers his expert advice, beginning with affordability.
(video by our sister brand Cala Homes)
How much can I borrow that is affordable to me?
Affordability is the top question when it comes to mortgages. However, each lender assesses affordability in their own way and each has slightly different processes in determining the income that they can use.
Therefore, you will likely find that some lenders are prepared to offer you more than others, however as a rule of thumb, most borrowers will be able to borrow up to 4.5 times their annual income.
If you’re considering a L&G home and want to understand your own affordability and what mortgage options are best suited to your circumstances, then get in touch with your local sales team who can explain the help available through Cala and can also recommend an independent mortgage broker who will give you advice and practical suggestions.
What’s the difference between a fixed rate mortgage and a tracker mortgage?
Traditionally, most homeowners opt for a fixed deal as they offer more certainty as you pay a fixed interest rate for an agreed period of time, usually two, three or five years.
A tracker rate usually follows the Bank of England Base Rate, which can rise and fall, depending on economic circumstances.
The main difference between the two is that a fixed rate mortgage means you will pay the same every month for the duration of your mortgage deal. Whereas a tracker mortgage will move up or down in line with external market conditions.
It is important to note that both products have their advantages and disadvantages, and so when you speak with your recommended mortgage broker they will discuss all factors that will help you make your decision on what suits your own personal circumstances.
Is the Government offering any help?
As you may already be aware, Help to Buy schemes across the UK have come to an end. The Mortgage Guarantee scheme is available but some homebuilders, including Cala, will provide the Deposit Unlock scheme, which makes 95% mortgages, through selected lenders, more accessible. For more information on Deposit Unlock, read our informative blog on this new initiative which could make your move to a new home a reality.
Mortgage affordability, products and schemes have become complex, but don’t worry, you aren’t expected to learn them all by yourself. To make life easier engage with a broker you can trust and who can help and support you to make decisions based on their expert advice and your personal circumstances.
If you’d like help selecting an independent financial advisor, L&G Homes can put you in touch with trusted partners we work with and would recommend.