Thomas and Amara First Time Buyers

Image of a young couple discussing their first mortgage

*Names have been changed for privacy*

Thomas and Amara

The Scenario

We were first contact by Thomas after we had helped a colleague of his complete on their remortgage. Thomas and Amara wanted to move in together but did not want to spend money on rent. They wanted to own as soon as they can.

Thomas is a graphic designer for a digital marketing company and Amara works in a nursery with young children. They are both employed and have no dependent children.

We spoke with them early in the process before they had even found a house. We completed a full Fact Find Questionnaire with them to establish all the facts up front. Knowing all the small details helped their adviser work out exactly what they could afford to borrow. Putting that amount together with their deposit they knew exactly how much they could spend on a house. And then the hunt was one.

Thomas has multiple conversations with his adviser over the phone. Each time they went to see a house they would speak with their adviser to go over details about the property. With it being the first time they’d bought a house, their adviser was able to give them lots of tips on what kind of questions they should be asking of the estate agent, and how to research local schools and amenities that may not be obvious when just looking at the house itself.

Eventually they found a house for sale at £130,000. With a little confidence and some guidance from their adviser, they were able to negotiate the price down to £125,000 as well.

They had a 5% deposit (£6,250) and we applied for a mortgage of £118,750 (the remaining 95%).

We applied for the mortgage over a 30-year term which gave them a monthly payment of £487.94. The interest rate was fixed as well for the first 2 years so that they would know exactly what is coming out each month.

We also put in place a life insurance policy with critical illness and an Income Protection policy for each of them. The total of their premiums for all their protection policies is £67.27.

Previously, Thomas had been paying £565 per month to rent his two-bedroom house. Now, for £10 less per month, he and Amara owned their own house and were fully protected.

Why did we recommend this?

Firstly, we recommended a mortgage of 30 years so that the monthly payments would be comfortable in the early years. Amara had recently started a new job so they wanted to make sure they weren’t over committed when they bought their house in case she wanted to change employer. Additionally, as Thomas was already used to paying £565 per month in rent, they wanted to keep their monthly budget as close to this as possible.

Secondly, we put in place a 2-year fixed rate for 2 reasons. The first is that because they borrowed 95% of the house price, the interest rate was a littlie higher. It is 2.8% currently. In 2 years’ time, when the deal ends, we’ll look to remortgage them to a lower rate if one is available. As Thomas was expecting a pay rise as well, instead of refinancing for the remaining 28 years, we will look to refinance the mortgage for 25 years. With Thomas’ higher wage they will be able to afford the higher payments. This will mean the mortgage is paid off sooner – saving them thousands in the long run.

Finally, we put in place Life Insurance with Critical Illness cover. This means that should one of them die or be diagnosed with something serious, they will be able to claim and receive enough money to pay off the mortgage and keep the house. We also put in place an Income Protection policy, so that if either of them can’t work due to an accident or long-term illness, they’ll still receive a monthly income to support their recovery and lifestyle.

Here’s what they said:

My Simple Mortgage are the real deal. I’d advise absolutely anyone to speak with them. Throughout the entire process they’ve been engaging, helpful and genuinely nice people that couldn’t do enough for you. They’ve really taken all the stress out of myself and my partner getting our first mortgage.

James, Amy and the rest of the team are brilliant and really know their stuff, and it’s such a personal service. Can’t thank them enough.

Speak to these guys!!”

Thanks guys! We loved working with you too.

If you’re looking to buy your first home, and need someone to walk you through it all, call us today on 0345 094 1567 or click here and one of our advisers will be more than happy to help.

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Posted on

21 November, 2019