by Grant Seaton, of Cumberland Building Society

Last updated at 17:47, Monday, 27 August 2012

Buying your first property can appear a daunting experience but with the right help along the way it should not be as stressful as many would make it out to be.

If you are considering dipping into the property market for the first time, then the following tips may prove useful to you.

Forward planning:

Unless you already have some money put away, you will need to start saving for your first home. Most first-time buyers will need a deposit of at least 10 per cent of the total cost of the property. The more money you can save, the less you will need to borrow. Some lenders now offer special savings accounts for this purpose, which pay higher rates of interest, offer flexibility as to how much you can save each month and offer ‘extras’ if you take out your mortgage with them.

How much can you borrow?

This is a key question. It is important to establish some borrowing limits before you start looking for your dream home. A mortgage advisor will talk you through the whole process and give you an initial indication of what you can expect to borrow. This will depend on a number of factors including how much you earn, what your out-goings are, and how much you can put down as a deposit. An early meeting with a mortgage advisor will be of real help.

Different types of mortgages:

There are a lot of different choices. Repayment or interest-only? Fixed, discounted, cashback, tracker, offset? It is so easy to get confused. Too much choice often makes the decision harder. Again, this is the point where a good mortgage advisor comes in. They are able to talk you through all of the various choices, explaining them to you in a straightforward way, and recommending what would be best for you given your particular circumstances.

A helping hand:

Sometimes you may find that you need to borrow slightly more than your current income and outgoings will allow. This is not necessarily the end of your dream, providing that someone is willing to help out.

A friend may be willing to buy jointly with you to help spread the cost. Two incomes are likely to prove better than one. If this is a possible option for you, then both you and your friend should obtain legal advice before you begin your search for a property.

A parent or close family friend may also be able to help. They might be willing to guarantee your payments enabling you to borrow the amount you require or give you a contribution towards your deposit. Perhaps they may have savings that they can put down as additional security for a mortgage which may help you to borrow a higher percentage of the value of the property, while still allowing them to continue earning interest on their savings.

So, if this year is going to be the year that you take the plunge into the property market, then do make sure that you get some good advice at an early stage.

• To view the Cumberland’s current range of mortgage and savings products go to www.cumberland.co.uk or better still, call into your nearest branch to speak to a member of staff.
• Your home may be repossessed if you do not keep up repayments on your mortgage.

First published at 14:04, Friday, 24 August 2012
Published by http://www.cumberlandnews.co.uk