Buying your first home is a monumental step. It’s a journey filled with excitement, but it can also feel overwhelming at times—especially when it comes to securing a mortgage. At London Mutual Credit Union, we understand that purchasing a home is more than just a transaction; it’s about finding a place where memories are made. That’s why we take a people-first approach to lending, ensuring our members receive personalised support from start to finish. Here are some key tips to help you on your home-buying journey, along with why we’re here to support you every step of the way.
Get to Know Your Finances
Before you start looking at properties, make sure you have a clear understanding of your finances. This means:
- Checking your credit score.
- Determining how much deposit you can afford (typically 5-20% of the property’s value).
- Factoring in extra costs like stamp duty, legal fees, and surveys.
Boosting Your Chances of Getting a Mortgage: You can enhance your credit score by:
- Getting on the electoral roll.
- Regularly checking your credit file.
- Ensuring timely payments and keeping credit applications to a minimum.
Why London Mutual? We manually underwrite our mortgages, meaning we take a detailed look at your entire financial situation. Unlike larger banks that may rely on a rigid checklist, we consider your unique circumstances, making our lending decisions more personalised and flexible.
Know What You Can Afford
It’s important to have a realistic idea of how much you can borrow. Mortgage lenders will assess this based on your income, outgoings, and the size of your deposit.
Typical Additional Costs:
- Arrangement Fee: Charged by the lender for taking out the mortgage – typically about £1,000+. (Here at London Mutual Credit Union, we do not charge any arrangement or advice fees.)
- Valuation Fee: Lenders charge this to assess the property’s worth – typically around £325 to £525.
- Legal Fees: For all the legal work involved, budget for £500 to £1,500.
- Stamp Duty: A fee to HM Revenue & Customs based on the property price. First-time buyers in England don’t pay stamp duty on the first £425,000 of a main residential property.
Why London Mutual? Our mortgage rates start from just 4.74% (variable), and we can lend up to 80% of the property’s value. We offer maximum loans of up to £350,000, and if you’re buying with a partner or friends, up to four applicants can apply together, giving you more flexibility in what you can afford.
Understand Mortgage Types
What We Offer:
- Discounted Rate Mortgages: Start from 4.74%, offering lower initial payments for a set period (2 or 3 years) before reverting to the standard variable rate. This means your first few years of payments will be less than if you were on a standard variable rate.
- Variable Rate Mortgages: Payments can fluctuate based on the market, providing potential for lower costs but with the risk of increases.
Why London Mutual? We offer a range of options, including variable rate and discounted period mortgages, with no arrangement fees or early repayment charges on our standard variable rate, ensuring transparency and flexibility.
Get Expert Help
Navigating the mortgage process for the first time can be tricky. It’s essential to have trusted experts to guide you through every step—from understanding the application process to securing the best rates.
Why London Mutual? At London Mutual, you’ll be assigned a named mortgage advisor who will work with you to understand your requirements and help you navigate the process of buying your home. We also underwrite all our mortgages manually, allowing our team to reach a decision based on looking at your full circumstances, rather than a knee-jerk ‘yes’ or ‘no’. You won’t be just another number—we take a tailored approach to ensure that you get the support you need to buy your dream home.
Think Long-Term
Your mortgage is a long-term commitment, and it’s vital to consider how future changes in interest rates, your income, or your lifestyle might impact your ability to make repayments.
Why London Mutual? With our people-first approach, we work to ensure you understand the full implications of your mortgage and help you plan for the long term. Since our rates are variable, they will adjust with the market, but we’re here to guide you on how to best manage these changes.
Saving for Your Deposit
While deposits typically range from 5% to 20%, our minimum required deposit is 20%. Consider options to reach this threshold, such as:
- Lifetime Individual Savings Account (LISA): You can use a LISA to buy your first home (for properties costing £450,000 or less) or save for retirement. You must be aged between 18 and 39 to open a LISA. You can contribute up to £4,000 each year until you’re 50, and the government adds a 25% bonus to your savings (up to a maximum of £1,000 a year). If you’re buying with another first-time buyer who also has a LISA, you can both use your accounts toward the same property.
- Forces Help to Buy: We are happy to accept a Forces Help to Buy (FHtB) loan provided by the MOD as part of your deposit, allowing you to secure up to 80% loan-to-value (LTV).
Ready to Get Started?
At London Mutual Credit Union, we’re more than just a lender. We’re a partner in your home-buying journey. Whether you’re a first-time buyer or looking to remortgage, our team is here to help you find a mortgage that suits your needs with competitive rates and personalised service.
Contact us today to speak with one of our mortgage advisors and start your journey towards owning your first home. We’re here to make the process as smooth and stress-free as possible!
