First time buyers that may have trouble with the ancillary costs associated with moving could be helped by the new trend in mortgages for first time buyers, cashback mortgages.
The most prominent lender to offer this type of mortgage is Halifax, which is offering £1,000 on their new mortgage offer.
Typical moving costs could be as much as £600 and legal fees tend to be within the £850 - £1,500 range according to Money Advice Service, the Government website.
Aaron Strutt of Trinity Financial emphasised the attractiveness of these types of mortgages for first time home buyers:
"For some people the cashback can make a huge difference at a time when first-time buyers are trying to get as much money together as possible,” he said. “Cashback options are very popular, especially when they are through the big banks like Halifax."
Other providers that offer similar cashback mortgages are Accord Mortgages, Post Office Money and The Furness Building Society, which offer £1,000, £400 and £1,500 respectively.
It's important however to assess the total costs of the mortgage taking all aspects of the terms in to account. First time buyers are particularly interested in these types of mortgages, with a particular focus on legal fees according to John Phillips of Just Mortgages:
"Generally, legal fees will be part of the mortgage deal, but that means the borrower has to use the lender’s solicitor. However, many buyers prefer to use their own solicitor someone local who they can meet face to face and check up on the progress of their case.
A cashback mortgage allows the borrower to pay for a solicitor they are happy with."
Aaron Strutt of Trinity Financial reminds borrowers to ensure they do not pay more for the mortgage overall purely for the cashback benefit:
“If the lenders are providing you with cashback, you need to check the total costs to ensure there are not better deals on the market,".
Are you thinking of making a move this year? Our Mortgage team here at Westminster Wealth can ensure that you receive the most suitable mortgage for your personal circumstances, needs and objectives. Contact us today.
Information is based on our current understanding of taxation legislation and regulations which is subject to change.
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