Buying a home is always a significant event for anyone and, whether a first time buyer or an experienced homeowner, there are always key decisions to make.
At present, in a period of abnormally low interest rates combined with the likelihood that rates will eventually rise, the choice of mortgage scheme is a major consideration.
At present, in a period of abnormally low interest rates combined with the likelihood that rates will eventually rise, the choice of mortgage scheme is a major consideration.
There are a number of options available to those seeking a mortgage. Currently there is a significant volume of customers who have selected a mortgage rate fixed for five years on the assumption that interest rates are set to increase soon. Customers, however, should not rule out tracker rates which take advantage of the low rates now available. In addition, and importantly for those who want to keep options available for fixing in the future, after three months our tracker rates allow customers to move to the equivalent fixed rate for the remainder of the product term. While the product fees that are chargeable on some of our fixed rates would apply, customers may recover these fees and even reduce overall borrowing costs from the savings made compared to staying on the tracker rate if interest rates rise sufficiently. Alternatively, customers can opt for some of the loan on a fixed rate and some on a tracker if they want to hedge their bets.
A starting point for anyone considering a house purchase is a discussion with our mortgage specialists who can lay out all the options for the customer and explain the schemes including how the tracker, fixed rate and variable rate mortgages work, how mortgage repayments are calculated and what options are available to swap between one product and another. They will look at the unique circumstances of the customer such as their deposit, employment and salary and explore what they can realistically afford to repay on a monthly basis.
Once a meeting has been held with a member of the NatWest mortgage team and an application processed, customers can expect an answer in principle about whether the mortgage will be granted within two weeks, so people can immediately concentrate their minds on the finding of a suitable property in the price range agreed.
Our mortgage team is there to help throughout the home buying process, even before you start to look, to the completion day and beyond. They will also discuss insurance that is required and will assist with the schemes and options available designed to protect the home should unforeseen circumstances prevent the mortgage holder from meeting the regular payments.
The needs of every customer are inevitably different but in our examples below, readers may recognise their own circumstances.
for example
These illustrations show just three customers who we have been able to assist during the last few months.
Young professionals Paul and Joanne buy their first home together;
“We wanted to buy our first property together and I already owned a three bedroom town property which I needed to sell first. I approached NatWest where I am an existing mortgage customer to see if I could trade up with my partner.
The bank arranged to amalgamate the two mortgages that I already had and, with my partner, we were able to obtain a joint mortgage to enable us to buy the larger property we had our hearts set on. The property cost more than £600,000 and we were able to borrow £440,000.
With the help of the senior mortgage manager at NatWest who answered all our questions and set out all the options that were available to us, we were able to buy our ‘dream’ home.”
40-year old Amanda is a self-employed entrepreneur who wanted to invest in a buy-to-let property;
“I wanted to purchase a second property as an investment so I could let it out for rental purposes. My NatWest mortgage representative was brilliant and offered me the product which best suited my needs. For me the most important role the bank played was in updating me step by step as we went through the process.”
Peter, a homeowner looking to downsize in his retirement and buy a newer property;
Peter owned a detached bungalow with a considerable amount of land. The objective was to acquire a newer property which had less land and which would be easier to maintain during his retirement. Peter explains:
‘The Bank understood our requirements from the outset, organised various mortgage and insurance options for us to select from and once we chose the best mortgage and insurance offers for us they were set up quickly with no hassle. One part of our move that was stress free!’
*Clients’ names have been changed to respect privacy.
Thinking of buying a property?
For more information on NatWest’s full range of mortgages, why not visit our website (www.natwestinternational.com) or simply contact us on 01481 703800 to arrange a relaxed meeting with one of our mortgages team.
Words | Owen Lee
Owen Lee is Relationship Manager, Premium Banking & Retail Mortgages at NatWest Guernsey
