Without a doubt, the road to becoming a homeowner can be challenging. That is the reason why many people are often afraid to consider a mortgage, not to mention the countless number of hurdles out there that further makes it a daunting phase. Well, it’s understandable that first time home buyers don’t have the money or the time to waste on selecting wrong mortgages, so to save you from the misery first buyer mortgage turns out to be a lifesaver. Before discussing more, the benefits that first buyer mortgage has in store, let’s know more about its unique features.
The Features of First Buyer Mortgage
First-time buyer mortgage is focused towards those people who are buying homes for the very first time. This form of mortgage features incentives deals and many more rewards ensuring you can get your adorable home in no time. The elements of such a mortgage are like typical home mortgages, meaning you’ll have mortgage term, loan to value ratio and the mortgage has to be paid every month.
Thus, the features of this loan include:
- Mortgage Probability: If you are selling one property and planning to buy another one then simultaneously you must close the existing mortgage and open a new one. But, with mortgage probability you get to keep the same loan by transferring it into the new home, allowing you to avoid those unwanted cancellation costs and application fees.
- Repayment Frequency: The repayment that you make will take you closer towards paying off the mortgages and the frequency at which this is done, will decide whether you will be able to make the most of first buyer mortgage or not. Most of the lenders allow monthly, fortnightly and weekly repayments.
- Additional Repayments: In this loan, you can pay extra money for paying off the loan and extra payments tend to reduce the tenure of mortgage along with the interests too. Certain fixed and variable rate loans have a maximum amount for repayment, while others may not have such requirements.
The Amazing Benefits of First Buyer Mortgage
Apart from the incredible features, there are certain benefits that make first buyer mortgage the best option for first-time buyers and these are:
- High Loan to Value Ratio (LVR): Loan to value ratio or LVR can be defined as the amount that can be borrowed in form of a percentage from the total value of the property. On an average LVR is limited to 80%, but in case of first buyer mortgage, this can go as high as 95% of the property value, requiring the borrower to have at least 5% deposit. While in traditional mortgage an LVR of 80% would need 20% deposit.
- Low Rates and Minimal Fees: If you are finding it difficult to afford a property then this mortgage will help in keeping the costs as minimal as needed. This is because of the upfront fees and interest rates that remain lowest in these mortgages.
- Guarantor Option: There are a few lenders that provide first time buyers a chance to secure mortgage by having a family member or friend as the guarantor. This is a great option when you have low or no deposit but can count on people who are willing to meet those monthly mortgage payments.
- Professional Assistance: When applying for the first buyer mortgage, you can expect advice from experts who will let you manage the mortgage in a better way and provide the much-needed assistance in terms of emergencies or stress.
At last, to experience the best of the first-time mortgage never forget to compare various options around and then choose the appropriate one.