Mortgage lifecycle

Whether you’re just starting out as a first-time buyer, or you’ve been on the property ladder for a while, a mortgage is a big financial commitment.  With the amount of money involved, making sure you choose the right mortgage for your own personal circumstances is very important, as is getting professional advice to help you with the process.

Starting out

As a first time buyer, many lenders will require you to raise a significant deposit – that's why the government launched a new Help to Buy scheme. This scheme is aimed at helping new or existing homeowners to climb the housing ladder and offers buyers the opportunity to buy a property even if they only have a 5 per cent deposit.

But, generally, the bigger your deposit as a percentage of the purchase price, the wider your choice of mortgages and the better the interest rates on offer will be! A financial adviser can put together a personal financial plan to help you to build up your savings for a deposit and other costs. They can also advise whether or not the Help to Buy scheme is appropriate for you.

Moving on

If you find your circumstances have changed, whether you’re moving house or your financial situation has altered, it’s important to think about how this will affect your mortgage.  It’s a good idea to review your mortgage regularly, even if you aren’t moving house, as you may need to renegotiate your deal to suit your needs, or perhaps you could benefit from better interest rates elsewhere.  A mortgage adviser can help you with this, to find the best deals either with your current provider or an alternative mortgage company.  Don’t forget that you may have to pay termination fees or a redemption penalty on paying off some mortgages early – a mortgage adviser can help you work out the sums to see if you are better off paying those charges and getting a new mortgage at a better rate, or if you should just stay put.

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 you require a cash lump sum once you have paid off your mortgage you may consider downsizing or equity release schemes.  Equity release 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.  If you are consider releasing equity from your home it’s important to take good financial advice from a financial adviser, as it’s a significant financial decision which can affect not only your own future but that of your children too.  

No matter what stage of the mortgage lifecycle you are at, getting advice from an IFA or independent mortgage adviser can be the best way to explore all of your options and find the best solutions for you. Find an adviser near you here.