Whether you’re just starting out, or even if you’ve been on the property ladder for a while, a mortgage represents a big commitment.  But for most people, owning your home creates a great sense of security.

The amounts of money involved in buying property mean that this is usually the biggest financial commitment in any person’s life.  You may buy your first property with friends, a partner, in an arrangement with a housing association, backed by your parents – or on your own, as a ‘first time buyer’.  In every case though, it’s important to get advice from an expert who can help you deal with the complicated administration involved.

Starting out

As a first-time buyer, you’ll usually need to raise a significant deposit – as much as 40% of the property’s purchase price in some cases.  On top of that, any properties valued at over £250,000 will incur Stamp Duty (under this amount, first-time buyers currently don’t need to pay this tax, although this concession is due to end on 25 March 2012).  An independent financial adviser (IFA) can help you put a personal financial plan into place, to help you build up a deposit and money to cover other costs of buying a property in preparation for your first purchase.

If you’re buying a property with friends, or with your partner, then you’ll probably be sharing the finances involved.  Lenders apply a set of criteria to their products, which means that mortgage companies allow various numbers of people to buy a house together.  In addition, some lenders will take different multiples of salary into account.  For example, if four friends are buying a house together, then the lender may use only the salaries of the two highest earners to calculate the amount they’re willing to offer.

Moving on

You may want to move house: perhaps to a larger property for a growing family, or if you change location due to work commitments.  It’s important to remember that, depending on the terms of your contract, you sometimes don’t need to move house to renegotiate your mortgage deal – and also that some mortgages are portable to a different property.  Your IFA or mortgage adviser can help you find better rates, either with your current provider or an alternative mortgage company.

Later in life

Ideally it is best to have a plan in place to pay off your mortgage by the time you retire - as retirement can be a time when income reduces and becomes fixed, when pensions begin to pay out and salaries stop.

If a lump sum of cash is required, for example to buy that new car, pay for a holiday or home improvements, or simply to make daily life more comfortable, it’s sometimes possible to access all or part of the equity in your house, using an Equity Release product.  This is a type of loan on which the debt is often repaid when the person taking out the loan passes away, or moves out of the property into residential care and the house is sold.  It’s vitally important that anyone taking out this type of mortgage takes good financial advice from an independent financial adviser (IFA), as it’s a significant financial decision.  If this is something you think you may be interested in you might also like to read our ‘Equity release and home reversion’ section.

No matter what stage of the mortgage lifecycle you are at, advice from an IFA or independent mortgage adviser can help you explore your options and make plans for the future.