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Is Buying A Property A Traumatic Experience??
by Jason Samuel

Apart from the death of someone very close or divorce the
most traumatic thing that we contend with in our lives is
moving house and if you are a first time buyer and having
to wade through the whys and wherefores of the mortgage
world it can just be too baffling and bewildering (remember
that mortgage in French actually means death guarantee!)
But take heart, moving into your first home is also one of
the most exciting and exhilarating moments of your life.

If this is your first purchase, you need to study the
market for several months so that you feel comfortable
about the location you want and the current values of the
type of property that you're looking for. Many people fall
in love with the first house they see or one that is
particularly pretty but sitting on the edge of a quarry!
Look at the location and make that your priority rather
than cosmetic things that can be changed relatively easily
and cheaply. If you are thinking about living in this house
for just a few years then think about the resale value. Try
to find something that will appreciate in value; again,
this often goes back to finding the right location.

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.

Work out how much the monthly repayments will be and check
that you can comfortably pay this and enjoy a reasonable
standard of living. Always keep in the back of your mind
(and a savings account) the prospect of a rainy day
Your decision as to what type of mortgage is right for you
will depend where you are on your own career path and how
secure your job is. It will also depend on just how much of
a risk taker you are. For instance, a fixed rate mortgage
will give you the chance to know exactly what you payments
will be for the whole of the term, whereas if you gamble on
a variable rate you could have some good months where
repayments are low followed by some lean times when the
rates rise.

It's worth spending time and energy negotiating the best
deal. There are just so many companies offering variations
that it changes overnight (or even over the course of a
phone call) but a good deal can save you many thousands of
pounds. In addition to the savings, check that there aren't
penalties if you want to move to an alternative lender
before the term finishes.

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