The real estate bubble has finally burst, shifting for the once seller market to what is currently the buyer market. This is exciting news for millions of first time homebuyers in the current economic climate who dreamt of purchasing their very own home someday. Now is the best time than ever to buy homes that are on sale for below market rates.

First Time Homebuyers Can Choose Between Various Mortgage Loans

In fact, there are various mortgage loans you can apply for when purchasing a home in the UK. For example, there are the fixed, variable, capped, self-certification, joint mortgage, adverse credit mortgage rates and many more. Fixed rate mortgages have the interest fixed for the duration of the loan. However, the variable rate adjusts, which is contingent on the standard variable rate (SVR) of the lender.

Furthermore, the capped rate mortgage is a combination of the fixed and variable, which means that the rate has a limit on how high or how low it can adjust. The self-certification loans are for those who have difficulty proving their income or for the self-employed. Unfortunately, this type of mortgage loan has a higher interest rate that requires a deposit of 25% or more and the borrower may need to show their bank accounts to establish their credibility.

Locate The Right Bank For Your Mortgage Loan

Mortgage brokers connect potential homebuyers to banks who offer them different mortgages. This enables first time homebuyers to do mortgage comparison-shopping between the banks. Many first time buyers wonder how much money can they borrow and afford. A mortgage calculator computes your monthly payments based on the amount of the mortgage loan, its term, the interest rate, and your deposit.

For example, if you took out a mortgage loan for ₤320,000 and your interest rate is 5%, your monthly payments will be ₤1717.83 per month. In fact, the more money you deposit, the lower your monthly payments will be. However, mortgage advisors will guide first time buyers through the steps in securing mortgage loans. Their invaluable advice prevents many first time homebuyers from making costly mistakes or from falling victims to predatory lenders while purchasing their homes.