If you are getting married in the near future, then there is a good chance that you are also looking to buy a home with your spouse. Buying a home may well be the biggest financial commitment that you ever make, and it is important to make the right decisions in the first place if you want to avoid problems further down the line.
The first thing that you should consider is how much money you will be able to spend on a new property. Up until relatively recently, the maximum amount that mortgage lenders would be prepared to offer you was three and a half times the main earner’s annual income plus a year’s income from the secondary earner, or two and a half times the joint annual income if this is larger. You will also be required to pay a substantial part of the total cost of the property up front – typically 20-30%. During the property boom of the 2000s, mortgage lenders began to offer larger mortgages than this, ditching the multiple income model in favour of a looser, affordability-based model. However, the credit crunch has made lenders a lot more cautious, and borrowing criteria has been tightened up again as a result.
Purchasing a home almost always costs a lot more than you think it will. In addition to the cost of the property itself, you need to pay mortgage arrangement fees, surveyors fees, and for any improvements or repairs that need to be made to the property. While you may be offered the chance to include some of these fees in the total cost of the loan, it will work out a lot more expensive if you do it this way, as you will have to pay interest on the fees as well as the fees themselves. You will also have to pay for buildings and contents insurance, life insurance, utilities and council tax bills, and sometimes service charges. You should be sure to factor all of these things into the equation when you are deciding upon what size of mortgage you are prepared to take on.
You can obtain a mortgage directly from a building society or bank, or you can go through a mortgage broker. Brokers are sometimes able to negotiate better deals with lender, but their fees can often cancel out any savings that you might make by going through a middleman. If you choose to take the direct route, Santander are currently offering some great deals on mortgages for first time buyers.