First Trust Bank mortgages First time buyers guide to getting mortgage ready Call into any branch 028 9047 9221 www.firsttrustbank.co.uk
Contents 01 Introduction 02 Step by step guide to getting a mortgage 04 Saving for your first home 06 Insurance 08 What to look for when house hunting 10 Moving into your first home 12 Frequently asked questions about mortgages 16 A to Z guide a jargon buster to help you 18 Your mortgage checklist 21 Summary 2
Get mortgage ready An easy guide to help you get your first mortgage. Buying your first home is exciting and a huge decision, but that doesn t mean it has to be difficult. Just speak to us and we ll help you through every step of the process. By working together, we can help your big move run smoothly. This guide will help you plan ahead and may speed up the whole mortgage process. If you ve any questions, just contact us for a chat or to arrange an appointment with one of our mortgage consultants. The first step towards your new home is right here. Let s get started and get you mortgage ready. We know you ll have lots of questions so just ask. Phone us on 028 9047 9221 or visit www.firsttrustbank.co.uk 1
Step by step guide to getting a mortgage Before These steps you draw will give down you your all the mortgage, information you must you need have adequate to set you Life on the Assurance road to and buying Home your Insurance first home. in place. If you re thinking about a new home, then you need to be thinking about a mortgage. You ll find all the information you need to get mortgage ready right here. Step 1 Step 2 Step 3 Step 4 Step 5 A good first step talking to a First Trust Bank mortgage consultant Call in or make an appointment with your mortgage consultant. They ll make sure you re on the right track from the very start. Saving for your deposit You ll need to save or have a deposit to put towards the cost of your new home. We offer mortgages with different deposit amounts. Start saving today. View our range of savings accounts at www.firsttrustbank.co.uk Getting everything in order The most important part of your application is proving you can repay the mortgage loan. Your mortgage consultant will tell you exactly what you need to provide, such as payslips, bank statements, credit card bills or other documents. A sanction in principle Once you have your deposit, you can apply for a sanction in principle. This is when your bank agrees, in principle, to give you a mortgage, based on the information you ve provided, and your ability to pay the monthly mortgage repayments. You will then know exactly how much you have to spend on your new home. Looking for and making an offer on a home This is the exciting bit looking for your new home. Once you ve found it, you put in an offer. If it s accepted, it s back to us. 2
Step 6 Once your offer is accepted Let us know you ve made an offer and now want to go ahead and apply for a mortgage. You will need to provide details of the property and your solicitor. We will organise a valuation report before we send you our mortgage offer. We only use a valuer from our residential mortgage valuers panel. Step 7 Step 8 Step 9 Appointing your solicitor You can appoint a solicitor before starting your search or after you ve made an offer and received approval. The contract for sale The contract for sale is the agreement between you and the seller. It sets out all the agreed details such as price and planned completion date. Your solicitor will carry out the necessary checks and searches on the property prior to putting the contract in place. The loan funds A few days before completion, your solicitor will request the loan funds from us and arrange the transaction. A final note The final stages of the mortgage process may seem complex but don t worry we are here to help you through it. 3
Saving for your first home These days we all know the importance of putting away money for a rainy day, but did you know that it can be just as important to put money away to help buy your first home? Aim to save at least 5% of the purchase price in addition to your deposit. This should help to cover any unexpected expenses. If you have saved enough already, then great, you can proceed to the next stage. Otherwise you need to think about a savings plan saving regularly is key! You can choose from a range of savings accounts - ask us for details. How much will I need? This depends on the price of your new home. To find out about our range of mortgages phone us on 028 9047 9221 or visit www.firsttrustbank.co.uk Starting to save as soon as possible is a good idea, because any leftover savings will come in handy when it s time to start decorating your new home. How will I save? There are several ways to save with First Trust Bank, which are easy to manage. Start by doing a budget with your weekly outgoings and checking how much you can afford to save. For more information about ways to save with First Trust Bank, call into your local branch, phone 0845 6005 925 or visit www.firsttrustbank.co.uk 4
Register for Online and Phoneline Banking to help you budget and save Making your life easier Keep an eye on your spending and balance Pay your bills Transfer money between your accounts Transfer money to any UK bank or building society account Benefit from services like e-statements Set up and manage your standing orders Once you ve registered for Online Banking you can also manage your money on the move with Mobile Banking. To view our range of savings accounts or to find out more about Online, Mobile and Phoneline Banking, visit www.firsttrustbank.co.uk or phone 0845 6005 925. Start saving today. 5
Insurance Cover your mortgage Before you draw down your mortgage, you should have adequate life assurance and home insurance in place. Protection to cover your mortgage The type of life assurance you need depends on the amount, term and type of borrowing. We strongly recommend that you get advice on your protection needs. Home insurance Home insurance shouldn t just be about getting the minimum protection for your bricks and mortar. Your policy should be designed around you, reflecting the things you value most. The right cover in 3 simple steps Step 1 Choose the level of buildings cover you need Step 2 Add the value of all your contents (that s curtains, carpets and everything that would fall out if you turned your house upside down) Step 3 Remember to add extra cover for items you take outside your home (like your engagement ring, watch, camera or golf clubs) 6
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What to look for when house hunting Write a checklist of what you expect from your first home and bring it with you every time you view a property. Here are some things you should keep in mind during your hunt. Before you set out Save yourself a lot of time and effort by arranging viewings as close together as possible. It s much easier to make comparisons that way. First impressions count Before you go in to a house, study the outside. Does it look as if the current owners have taken good care of it? Check which direction it faces. That will tell you when you ll have sunlight during the day Go across the road and check out the condition of the roof. Look for broken tiles, or large patches of moss or weeds growing in the gutters. These can all be clues about how well the house has been looked after Look out for any cracks in the outer walls Will you have your own parking space, or is there shared parking? Does the property have security and fire alarms? Is it on a busy road and would children be safe playing outside? Revisit the neighbourhood in the evenings and weekends to ensure it still seems safe and peaceful. When you get inside Use your nose. Can you smell any dampness or rot when you enter the property? If the property has been freshly painted, make sure it s not hiding something such as cracks in the plaster work Check the quality of the window frames they can be expensive to repair Tap the walls, especially in older properties. If you hear a hollow sound, it could mean that the plaster has come loose Open every window and door and make sure that they re not warped or stuck Test the floorboards to check they re not springing up and down and the floor is in good condition Look out for any stains or signs of dampness. Damp stains in downstairs rooms could mean there s a plumbing problem in a bathroom upstairs, while damp stains in an upstairs room could mean a problem with the roof The carpets and curtains may be exactly to your taste but are you sure they re included in the sale price? Don t be afraid to ask! Check the age of the boiler, whether it runs on oil or gas and when it was last serviced 8
Check when it was last rewired (especially in older houses) as this can be expensive Take a measuring tape with you and check that all your furniture is going to fit List anything which needs to be repaired Check the plumbing as much as you can by turning on all taps, flushing all toilets and trying all showers. Don t be shy about checking you don t want any nasty surprises after you move in. Extra tips for apartments and townhouses Make sure you find out what the annual service charge is for the upkeep of common areas like gardens, lifts, or painting the exterior of the building Check if a parking space comes as standard or if you have to pay extra Is any storage provided for items like bikes? It can be very inconvenient to have to park them on the balcony of an apartment, for example If you ve got a pet, make sure they re not excluded by the management company. Is there a washing line or laundry facility in the building, or will you have to run up a higher electricity bill by tumble drying all your clothes? Many showhomes or apartments create the illusion of space by fitting them out with smaller than normal furniture. Lie on the beds and sit on the couch to check if they re standard size. 9
Moving into your first home At last, the paperwork has all been processed. You re now a step closer to moving into your new home. But there s still a little bit of work to be done. You might be currently living with your parents, or perhaps renting. Either way, your move will be far smoother if you carry out the following actions. Six weeks before As a first time buyer there s a chance you don t own much furniture. So it s time to go shopping If you do have furniture, get a floor plan of your new home and work out where everything is going to go Get friends and family involved to help you move. Or hire a removals company If you re renting, don t forget to contact your landlord to tell them you re moving out. Four weeks before Start packing. Make sure you label each box clearly You ll have important documents that you definitely don t want to go missing in the move. So keep them in a file and store in a safe place If you re leaving a rented home, contact your gas, electric, oil, phone and broadband suppliers and let them know Consider setting up a redirect with the Post Office for your post to go to your new address. Contact your home insurance company and let them know about the move, and arrange any new cover that you may need. 10
Two weeks before Confirm the date with your removals company, if you are using one, and make sure they have directions Let everyone who may want to contact you know about your move e.g. friends, family, your bank, your health insurance company, your car insurer Pack first-night items separately such as sheets, towels, toiletries, kettle, alarm clock, a change of clothes If you re doing some or all of the removals yourself, get large sturdy cardboard boxes, bubble wrap and lots of sticky tape. On moving day Stay in touch with your removal company to make sure there are no misunderstandings Record all meter readings, such as gas and electricity Stay until the removals firm has finished and don t sign their inventory sheet until you ve gone through it thoroughly Keep a copy of it until all your possessions are delivered and unpacked, the charges have been paid and any claims are settled Be careful lifting heavy furniture or white goods. Recruit a few friends to help with the heavy lifting. 11
Frequently asked questions about mortgages We know you will have questions and if they are not covered by the answers below, please contact us on 028 9047 9221 Q1. How does First Trust Bank work out how much I can borrow? This really depends on how much you can afford comfortably in monthly repayments. This is for the length of your mortgage, which may be up to 30 years, depending on your age. We look at the detail of your overall financial situation including income, outgoings, savings and other loan repayments. Then we calculate the monthly mortgage amount that you can afford to repay. You ve probably already worked this out yourself, but it s important to remember a few key points. Most importantly, only reliable income should be included in your calculations. By this we mean guaranteed income bonuses and one-off payments shouldn t be included Remember that your outgoings may increase in more ways than just the monthly mortgage repayment. There s the cost of life assurance and home insurance to consider. Kick start your savings now. Buying your first home may be one of the most exciting things you do and there is a lot to think about and organise. One of the important things the Bank looks at is your savings track record, so why not start now? Q2. What proof of income is required? As a mortgage is a long-term commitment, we can only include your sustainable income when calculating the amount you can borrow, not bonuses or other one-off payments. To show your sustainable income you will need to provide 3 months payslips. Q3. I am a first time buyer. What documentation do I need to supply with my mortgage application? We need to see records of your bank accounts, savings and debt. Of course, we will have access to any First Trust Bank records, but for any non-first Trust Bank accounts you will need to supply copies of statements. 12
The mortgage consultant at your local branch can explain everything you need and there is a checklist included in this pack. But, at the very least, all customers need to supply: Three months bank statements for any non-first Trust Bank accounts Proof of savings and any funds you will be putting towards the purchase of your home (again, only if these savings are not held with First Trust Bank) Three months statements for all non-first Trust Bank borrowings e.g. credit cards, car/personal loans and mortgages. You will also need to supply evidence of your employment and income. For PAYE employees, this includes: Three months payslips Your P60 Having all these documents ready when you apply will speed up your application. See page 19 for more information. Q4. I am self-employed/a company director. Can I get a mortgage? Yes provided your income is sufficient and you provide documents to support your application. We ll need to see: Three years financial accounts certified by your accountant Confirmation that your tax affairs are up-to-date and in order Three months account statements, for any non-first Trust Bank accounts. See page 19 for more information. Q5. What kind of insurance do I need to take out with a mortgage? You need to have home insurance (buildings cover) in place before you can draw down your mortgage. Q6. What is the difference between the interest rate and the APR? The interest rate is the actual rate at which interest is charged on the amount you borrow. We calculate this on a daily basis. APR stands for Annual Percentage Rate (APR), which is the total cost of your mortgage over its term, taking into account both interest rate charged and other fees. Q7. What other costs may be associated with purchasing a property? You should remember to budget for all the costs associated with buying a new property, which may include: Legal fees When you find the house you want and we have approved your mortgage, you need to choose a solicitor to act on your behalf. It is worth shopping around to get the best quote available. Valuation We ll arrange a valuation report, completed by an approved valuer from our First Trust Bank Residential Mortgage Valuers panel. Once approved, your letter of loan offer will be sent to you and your solicitor. Surveyors fees For your own peace of mind, you may want to organise a structural survey. It s not a Bank requirement, but will ensure that there are no faults that may affect your property s value. 13
Stamp Duty If you buy a property in the UK over a certain price, you have to pay Stamp Duty Land Tax. This is charged on all purchases of houses, flats and other land and buildings. Your solicitor should give guidance on how much you ll have to pay. Booking or arrangement fees Depending on the specific mortgage you choose, you may have to pay a booking or arrangement fee. Ask your mortgage consultant for more information. Q8. What interest rate options does First Trust Bank offer? Your First Trust Bank mortgage consultant can tell you exactly what our current rates are and how they translate into monthly repayments, but this is how they work. With a fixed rate A fixed rate mortgage means that your rate and repayments will stay the same for a specific period of time, even when market rates change A fixed rate also protects you from interest rate increases but you will not benefit if interest rates fall during the fixed period An early repayment charge may be incurred if you wish to: - pay a lump sum - pay off your mortgage in full, or - switch to a variable rate mortgage within the fixed rate period. With a variable rate Your monthly repayments may rise and fall as market interest rates change You can make early or lump sum repayments to reduce the overall cost of your mortgage and pay the loan off early. An early repayment charge may apply. You should speak to your mortgage consultant for details. You can also switch to a fixed rate any time you want (subject to product availability and criteria). 14
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A to Z guide a jargon buster to help you Nobody likes jargon. So we avoid it wherever we can. However, there are always a few technical and legal terms you will need to know when looking to buy your first home. Hopefully, this little guide will help you. Annual percentage rate (APR). The yearly cost of your borrowing. It takes into account the interest rate charged and any other fees. Arrears. Mortgage repayments which have not been made when they were due. Broker. A third party adviser who advises on mortgage deals available from various lenders. Capital. The amount you owe excluding costs and interest. Also known as the principal of the loan. Collateral. Security offered against the value of the loan. Cost of credit. Cost of credit is the difference between the amount you borrow and the total you repay by the end of the loan period. Deeds. Official legal documents of land and property ownership. Deposit. The amount you pay which, when added to the amount of your mortgage loan, makes up the full sale amount of the property you are buying. EPC. An EPC, or Energy Performance Certificate, is the energy efficiency rating of a property and is calculated considering many things including light fittings and insulation materials. The label has a scale of A-G. A indicates the most energy-efficient homes, G indicates the least. Equity. The difference between a home s value and the outstanding mortgage debt. Fixed interest rate. The rate payable on a mortgage loan which does not change for a specified period, regardless of changes to the lender s variable rates. The specified period is known as the fixed period. Freehold or leasehold. A freehold title gives the holder ownership of the land and buildings for an indefinite period. A leasehold title gives the holder a right to use and occupy land and buildings for a defined period of time. Guarantor. Somebody, other than you, who can guarantee your mortgage loan repayments. Home insurance. You need a home insurance (buildings cover) policy in place before you can draw down your mortgage. 16
Interest rates. You can choose between our fixed or variable interest rates. Fixed makes it easy to budget because you know what your repayments will be. Variable lets you make early or lump sum repayments. Loan offer letter. Official mortgage offer. Loan to value (LTV). This is the percentage representing the difference between your mortgage loan and the value of your property. For example, a mortgage of 90,000 on a property valued at 100,000 would be shown as 90% loan to value. Maturity date. The last day of the mortgage agreement the day the mortgage loan must be paid in full or the agreement renewed. Offer. Once a mortgage application is approved, you ll receive a formal offer setting out the conditions of the loan. Your solicitor will also get a copy. Standard variable rate. A standard variable rate is a rate set by the lender, which may change. Terms and conditions. Remember all mortgages will have different terms and conditions, ensure you are familiar with yours. Valuation. A professional valuer from the First Trust Bank Residential Mortgage Valuers panel will complete a valuation report to gauge the market value of your property. It is important to remember that this report is not a detailed structural survey or planning survey. Mortgage loan. A long-term loan, usually 25 years, secured by a mortgage against the borrower s home. Why not arrange a jargon-free chat with your local mortgage consultant on 028 9047 9221. 17
Your mortgage checklist Things you ll need when meeting your mortgage consultant. 18
1st Applicant 2nd Applicant For employees Three months up-to-date consecutive payslips to confirm your basic salary Your P60. (This includes all income including bonus/overtime etc., so three months payslips are still needed to confirm your basic salary) Three months statements for any savings or investments not held with First Trust Bank Three months statements for any borrowings not held with First Trust Bank For self-employed / sole trader / director of limited company Three years audited/trading accounts (certified by your accountant) Confirmation of tax position from your accountant Minimum three months recent bank statements for accounts not held with First Trust Bank Minimum three months statements for any borrowings not held with First Trust Bank 19
1st Applicant 2nd Applicant Help with your mortgage If you have been given money to help with your mortgage, we need confirmation of it in writing and confirmation from the person who gave it to you that it doesn t have to be paid back. We may also need proof that the funds are available. For non-first Trust Bank customers You ll need to provide proof of identity and your home address a current passport or driver s licence and a current utility bill or bank statement Three months recent bank statements If you live abroad or bank abroad, a foreign credit check will be required. For new houses If the house is part of an estate development, we will need either an NHBC Certificate or other home build warranty approved by the bank. 20
Summary As a First Trust Bank mortgage customer you ll get access to: A mortgage consultant to guide you through the process Competitive variable and fixed rate options Repayment terms of up to 30 years For more information or to arrange an appointment contact us today. Phone 028 9047 9221 21
How to get in touch Phone 028 9047 9221 Visit any branch Visit www.firsttrustbank.co.uk If you have any questions, just ask. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE First Trust Bank reserves the right to withdraw or amend products at any time. Loans are granted subject to an appraisal of the applicant s financial standing. Applicants must be 18 years or over. Lending criteria, terms and conditions apply. An independent valuation will be required. Written quotations are available on request. A first legal charge will be required on your property. Primary residence only. First Trust Bank is a trade mark of AIB Group (UK) p.l.c. (a wholly owned subsidiary of Allied Irish Banks, p.l.c.), incorporated in Northern Ireland. Registered Office 92 Ann Street, Belfast BT1 3HH. Registered Number NI018800. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. FTM/M48 09/14