First time buyer common enquiries
Planning to buy your first home
How much do I need to save?
My parents have said they can help – what are their options?
What order do I need to do things in?
How long does the house buying process take?
What happens during the mortgage application process?
What’s the difference between a home survey and a valuation?
How do I find a solicitor or licensed conveyancer?
What insurance do I need?
Choosing your mortgage deal
What’s a higher lending charge?
How long can I take a mortgage for?
What happens at the end of the mortgage deal?
How do I choose the best rate for me?
Why are there often three different rates on mortgage adverts?
How is the interest on mortgages calculated?
What if the sale falls through?
Could I apply for a buy-to-let mortgage?
Changes to your mortgage
What happens if the value of my property goes down?
What happens if I want/need to move in the middle of a fixed rate or tracker mortgage?
What happens if I can’t keep up my repayments?
Planning to buy your first home
Currently you'll need at least a 10% deposit in order to take a new mortgage with the Halifax. However, on the subject of saving, remember that you'll need money to cover things such as solicitor's fees, stamp duty land tax, the valuation and any other moving costs as well.
Please note that for new build properties you'll need a deposit of at least 20% of the property value.
My parents have said they can help – what are their options?
There are various ways a parent, other relative or a friend can help. For example, one of your parents could guarantee to make your mortgage payments if you can't.
Alternatively, if they're thinking of giving you money towards your deposit, then that could help because you'll probably need a deposit of at least 10% of the property's value. In addition, a larger deposit will generally give you access to a lower interest rate, which in turn should make your monthly repayments easier to manage.
What order do I need to do things in?
It's a good idea to get a mortgage promise from a lender as your first step – it shows estate agents and sellers that you've got the ball rolling and that you're a good bet as a buyer. Get a mortgage promise from one of our mortgage experts, and we'll give you a certificate that shows you're a serious buyer.
How long does the house buying process take?
On average it takes about three months to buy a house once you've found the property you want – however, this can vary depending on other factors involved.
What happens during the mortgage application process?
A lender will want to know about your occupation, income and financial history to establish how much they can lend. They may need to make some enquiries of your employer, accountant, landlord, etc. They'll also carry out a valuation on the property to make sure it's worth enough for the size of mortgage you want.
Provided these enquiries and the valuation come back ok, we'll issue a formal mortgage offer to yourself and to your conveyancer. Once the solicitor has completed all the legal work, they'll arrange for any necessary documents to be signed by yourself, and then they'll contact us to arrange the date for the mortgage money to be sent to them to complete the house purchase.
What's the difference between a home survey and a valuation?
A valuation will be carried out by your lender to make sure the property is appropriate for the amount you want to borrow. It's purely for their purposes, though if they charge for the valuation they may give you a copy.
A home survey is something that you should consider, as it points out things you'd want to know about as the homeowner but that the valuation might not reveal. With the Halifax, your mortgage expert can arrange for one to be carried out at the same time as the valuation, or you have the option to arrange for your own survey. Your mortgage expert will discuss the features of the different types of valuations and surveys with you.
How do I find a solicitor or a licensed conveyancer?
Convey4u offer a conveyancing comparison tool which will allow you to find and compare quotes for solicitors and conveyancers in your local area.
It'll be a requirement of your mortgage to have buildings insurance. This covers the bricks and mortar, fixtures and fittings. It's also a very good idea to take out contents insurance as well - this protects all your possessions in your home, from furniture to jewellery.
It’s also a good idea to look into insurance to protect your mortgage. Life cover, Critical Illness cover and Payment Protection policies provide peace of mind should the unexpected happen, by making payments to help cover the mortgage.
Choosing your mortgage deal
What's a higher lending charge?
This is a charge some lenders make if they're lending above a certain amount of the property value. It's used to buy insurance for the lender in case they have to repossess the property and it's worth less than the mortgage.
How long can I take a mortgage for?
With the Halifax you can take a mortgage for a maximum of 40 years, or until you are 75 years old if that's sooner. Within that period you'll see that there are mortgage deals – such as fixed rates and trackers – that run for anything from one year to, on odd occasions, 25 years. Typically, though, they run for between two and ten years. When a deal ends, you can usually switch to another one – so you can keep moving from one deal to another for the overall term of your mortgage.
If the mortgage term goes beyond your retirement age, then we will need to assess your retirement income to ensure that it will remain affordable – your mortgage expert will discuss this with you as part of your application.
What happens at the end of a mortgage deal?
At the end of a fixed rate or tracker, your interest rate usually switches to the lender’s variable mortgage rate. However, they’ll probably offer you another mortgage deal, or you are free to find a new deal.
How do I choose the best rate for me?
Do you want the certainty of knowing that your interest rate won’t change for a set period? Or are you happy for it to move up and down with the Bank of England Bank Rate? This will tell you whether you want a fixed-rate mortgage or a tracker mortgage.
Why are there often three different rates on mortgage adverts?
Firstly, there's the actual rate you pay – depending on the product you select, this might be a fixed rate or a variable rate, such as a tracker. Then there'll be the rate you switch to after the fixed rate or tracker ends. Then there's the 'APR'. This stands for Annual Percentage Rate, and is intended to show the true overall cost of a loan. It includes the actual rate you pay plus any other costs such as any fees and charges the lender makes to set up the mortgage.
Further guidance on this subject is available on the moneymadeclear website.
How is the interest on mortgages calculated?
We calculate the interest on Halifax mortgages on a daily basis. This means that whenever you pay back some of the loan, the amount on which interest is charged reduces immediately.
What if the sale falls through?
This is always a risk, and you do need to be prepared for it – especially if you've set your heart on somewhere. If the worst does happen, the fact that you've got your mortgage agreed will make things much quicker when you find another place. Your lender will only need to check out the new property; they won't normally have to go through everything else again with you such as your income and outgoings – only if there's a gap of a few months.
Could I apply for a buy-to-let mortgage?
If you'd like to apply for a buy-to-let mortgage you will need to already have a mortgage or own a property, so you cannot apply for a buy-to-let if this is your first mortgage.
Changes to your mortgage
What happens if the value of my property goes down?
Since the 1980s there have been periods of property prices rising, falling and rising again. To an extent, it's all relative. The value of your home goes up and down, but so does the price of the next property you want to buy. It can become a problem, though, if the value of your home falls to a point where it's worth less than your mortgage – when it wouldn't cover the mortgage if you sold it. This is called negative equity. This isn’t necessarily a problem on it’s own – however, it may become an issue if you wish to move home, borrow more against your property, or move your mortgage to another lender.
What happens if I want/need to move home in the middle of a fixed rate or tracker mortgage?
With a mortgage from the Halifax, you can usually take your mortgage deal with you – provided we're happy to lend on your new home.
What happens if I can't keep up my repayments?
Your mortgage expert should help you work out what size mortgage you can afford based on your income and outgoings. But sometimes, after you've taken out your mortgage, things can get difficult - if you lose your job, for example. It's important to let your lender know about any difficulties as soon as possible; there are often ways they can help you through a difficult period – for example, temporarily reducing what you need to pay.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
