Please send us your questions, comments and suggestions concerning property, or the articles in First Time Buyer magazine.
Deeds vs Mortgage
I have just completed buying my first property and I’m a little confused about what proves who owns the property? Is it the deeds or the mortgage? – Georgia Copse
FTB says: Simply, the deeds show who owns a property. A deed is the official document that transfers the title of the property from one party to another, legally establishing ownership. It records the names of the current owner(s) and includes a description of the property. A mortgage, on the other hand, does not determine ownership but indicates that a lender has a financial interest in the property due to a loan. While the borrower may be the owner of the property, the mortgage gives the lender a claim to it if the borrower fails to repay the loan. So, ownership is shown through the deed, while the mortgage represents a financial obligation tied to the property.
Base Rate
Recently I have read a lot about base rate changes in the news. What is this and how does it effect my homebuying process? – Clayton Porter
FTB says: The base rate, set by the Bank of England, plays a crucial role in determining the cost of borrowing money, including mortgage interest rates. When the base rate is high, banks and lenders typically increase their mortgage rates, making it more expensive for homebuyers to take out loans. This leads to higher monthly payments, which can make it more difficult for potential buyers to afford a home. Conversely, when the base rate is low, mortgage rates generally decrease, making borrowing cheaper and resulting in more affordable monthly payments. As a result, a low base rate can encourage more people to buy homes, stimulating the housing market, while a high base rate can have the opposite effect, slowing down the market by making home loans less affordable. So, changes in the UK base rate can have a significant impact on both the housing market and individual buyers’ ability to purchase property.
Tips for getting a first mortgage
Are there any tips on what not to do on the lead-up to securing your first mortgage? I’m worried I am going to ruin my chances by doing something that might have a negative effect. – David Ford
FTB says: In the lead-up to getting a mortgage, there are certain things that could impact your chances of securing a mortgage. Changing jobs, making large purchases or opening new credit accounts can raise concerns about your financial stability and affect your debt-to-income ratio. Missing or late bill payments, reaching the limit on credit cards, or co-signing loans for others, can hurt your credit score and signal financial risk to lenders. Additionally, making large, unexplained withdrawals or deposits in your bank accounts could raise red flags. It’s also best to avoid any significant changes to your financial situation, such as getting married or starting up a business, until after the mortgage process is complete. Overall, maintaining financial stability and avoiding any actions that could disrupt your credit and finances will improve your chances of securing a mortgage.
Home Buyers Report
I have been recommended to have a Home Buyer Report done in the lead up to purchasing my first property. What does this involve and who does it? – Sunder Thacker
FTB Says: A RICS Level 2 Survey or Home Buyer Report is a detailed survey conducted by a qualified surveyor that assesses the condition of a property a buyer is interested in purchasing. It’s typically a more in-depth inspection than a basic valuation, but less detailed than a full structural survey. The report covers the property’s condition, identifying any significant issues such as structural problems, dampness, or potential repair work needed. It also provides advice on how to maintain the property and whether it might need urgent repairs or ongoing attention. A Home Buyer Report is especially useful for properties that are in relatively good condition, giving the buyer peace of mind and helping them make an informed decision. It may also highlight any risks that could affect the value of the property or lead to future costs, giving the buyer a clearer picture of the investment they’re about to make.
First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.
