Planning to buy your first home
Choosing your mortgage deal
Changes to your mortgage
How much do I need to save?
With most lenders you’ll need a 10% deposit – at least. But if you’ve got relatives or friends prepared to help you, you could get a mortgage with just a 5% deposit and yet get better rates than someone with 10%. Find out more about Lend a Hand - our exclusive first-time buyer mortgage deal.
On the subject of saving, remember that you’ll need money to cover things such as solicitor’s fees, stamp duty and any other moving costs as well. Use our calculators to see how much this could be.
My parents have said they can help – what are their options?
There are various ways a parent or other relative can help. For example, they could guarantee to make your mortgage payments if you can’t.
Or if they’re thinking of giving you money towards your deposit, then that could help because you’ll probably need at least 10% and, generally, the bigger the deposit you have the better the interest rate you’ll get, making those monthly repayments easier to manage.
And then there’s our Lend a Hand exclusive first-time buyer mortgage - that means your parents wouldn’t actually have to give you the money, you’d only need a 5% deposit, and yet you could still benefit from a better rate of interest.
What order do I need to do things in?
It’s a good idea to get a mortgage decision in principle from a lender first. It shows estate agents and sellers that you’ve got the ball rolling and are a good bet as a buyer. Sort a decision in principle with us and we’ll give you a certificate that you can use to show you’re a serious buyer!
How long does the house buying process take?
On average it takes about three months to buy a house once you’ve found the property you want – although this can vary depending on other factors involved.
What happens during the mortgage application process?
A lender will want to know about your occupation, income and financial history to establish how much they can lend. They’ll make some enquiries of your employer, accountant, landlord etc. They’ll also carry out a valuation on the property to make sure it’s worth enough for the size of mortgage you want. See our mortgage considerations.
Provided the enquiries and valuation come back ok, you’ll be sent a mortgage loan agreement, which you’ll need to sign and get witnessed. (Don’t worry, you’ll be told about the formalities.) This will then be sent to your solicitor. Once the solicitor has sorted all the legal work, they’ll arrange for the signed copy to come back to us and arrange the date for the mortgage money to be sent to them to complete the house purchase.
What’s the difference between a home survey and a valuation?
A valuation will be carried out by your lender to make sure the property is appropriate for the amount you want to borrow. It’s purely for their purposes, although if they make a charge for the valuation they may give you a copy. Find out more about our valuations.
A home survey is something you should arrange yourself as it points out things you’d want to know about as the homeowner, so it’s more detailed than a valuation. The surveyor will go into the property looking for things like signs of damp or structural problems. More about arranging your survey.
How do I find a solicitor or a licensed conveyancer?
You can find a solicitor in your local area on www.lawsociety.org.uk (opens in a new window), or specialist lawyers, trained and qualified specifically to deal with property transactions, known as licensed conveyancer. You can find a local licensed conveyancer from www.clc-uk.org (opens in a new window).
What insurance do I need?
It’ll be a requirement of your mortgage to have buildings insurance. This covers the bricks and mortar, fixtures and fittings. But it’s also a very good idea to take out contents insurance too – to cover all your possessions inside your home – from furniture to jewellery. Take a look at our home insurance for new mortgages.
You may also want to consider cover for your mortgage payments if you lose your job or become unable to work as a result of sickness or an accident, or to pay it off completely if you suffer a critical illness. See 'Protection for Life ’.
How long can I take a mortgage for?
With us it’s for a maximum of 35 years or up to retirement age if that’s sooner. Within that period you’ll see that there are mortgage deals – such as fixed rates and trackers – that run for anything from one year to, on odd occasions, 25 years. Typically though they run for between two and ten years. When a deal ends, you can usually switch to another one – so you keep moving from one deal to another throughout the overall term of your mortgage.
What happens at the end of a mortgage deal?
At the end of a fixed rate or tracker, your interest rate usually switches to the lender’s standard variable mortgage rate. But they’ll probably offer you another mortgage deal, or you could look elsewhere for a new deal.
How do I choose the best deal for me?
Do you want the certainty of knowing your monthly payments won’t change? Or are you happy for them to move up and down with interest rates? This will tell you whether you want a fixed-rate mortgage or one with a variable rate, such as a tracker.
Why are there often three different rates on mortgage adverts?
There’s the actual rate you pay. This might be a fixed rate or a variable rate, such as a tracker. Then there’ll be the rate you switch to after the fixed rate or tracker ends – usually the lender’s standard variable mortgage rate – although you should be able to switch to another deal at that time if you want to. And then there’s the ‘APR’. This stands for Annual Percentage Rate and is intended to show the true overall cost of a loan. It includes the actual rate you pay plus any other costs such as any fees and charges the lender makes to set up the mortgage.
How is the interest on mortgages calculated?
Daily on mortgages from Lloyds TSB. So whenever you pay back some of the loan, the amount on which interest is charged reduces immediately.
What if the sale falls through?
This is always a risk and you need to be prepared for it – especially if you’ve set your heart on somewhere. But if the worst happens, the fact you’ve got your mortgage agreed will make things much quicker when you find another place. Your lender will only need to check out the new property; they won’t normally have to go through everything else again with you such as your income and outgoings – only if there’s a gap of a few months.
What happens if the value of my property goes down?
Since the 1980s there have been periods of property prices rising, falling and rising again. To an extent, it’s all relative. The value of your home goes up and down, but so does the price of the next property you want to buy. It can become a problem though if the value of your home falls to a point where it’s worth less than your mortgage – when it wouldn’t cover the mortgage if you sold it. This is called negative equity. But even this isn’t necessarily a problem – only if you want to sell.
What happens if I need/want to move home in the middle of a fixed-rate or tracker mortgage?
With a mortgage from Lloyds TSB, you can usually take your mortgage deal with you – provided we’re happy to lend on your new place.
What happens if I can’t keep up my repayments?
Your mortgage adviser should help you work out what size mortgage you can afford based on your income and outgoings. But sometimes, after you’ve taken out your mortgage, things can get difficult. If you lose your job for example. It’s important to let your lender know about any difficulties as soon as possible; there are often ways they can help you through a difficult period – for example, temporarily reducing what you need to pay.
All our mortgages at Lloyds TSB have flexibility built in, so should you find yourself struggling, we’re more than likely able to help you.
What happens if I lose my job?
When you take out your mortgage you’ll have the chance to take out mortgage payment protection insurance. It covers your mortgage payments, usually for up to 12 months, if you lose your job or lose your income as a result of sickness or an accident.
