Buying a house is perhaps the biggest purchase many of us will make in our lifetime. However, DAM knows first-hand how much of a daunting process it can be- from figuring out how much you can afford, the deposit required and if the mortgage is right for you.
So, to make things a little easier, we have put together a beginners guide to mortgages- answering the most frequently asked questions in the simplest and most basic way to help you gain a better understanding of the house buying process.
What is a mortgage?
A mortgage is loan to buy property or land. When you get a mortgage, your lender gives you a set amount of money to buy a home, which you agree to pay back with interest over a period of several years. The average mortgage takes 25 years to pay- however that can be shorter or longer depending on how much of a deposit you put down when buying the property. You do not fully own your home until the mortgage is paid off.
What is a deposit?
A deposit is the money you pay upfront to buy a home- normally a deposit is required to secure a mortgage. The size of deposit required is dependent on the type of mortgage- generally, the bigger the deposit the smaller the mortgage and so the cheaper your monthly mortgage payments will be.
Where can I get a mortgage?
You can apply for a mortgage directly from any bank or building society- such institutions are often referred to as lenders. You can also use a mortgage broker or independent Financial Advisor to compare the different mortgages on the market in order to decide the best one for you.
How do I apply for a mortgage?
Applying for a mortgage can be a long and detailed process- however before applying for a mortgage it is always best to work out what you can afford and if you are mortgage ready. For a more detailed step-by-step guide to mortgage applications, click here.
If you are considering buying a home and beginning to think about a mortgage- check out our Mortgage Affordability Calculator here and our Mortgagesection on our DAM Community to get you started.