Buying your first home can be an exciting prospect, and owning your own property, rather than renting, can give you peace of mind and a sense of security. However, before you start choosing kitchen appliances, consider some of the initial factors involved in purchasing your home.

How much money do you have to contribute as a deposit?

Most mortgage providers will ask you to pay at least 5 percent of the purchase price. However, the higher percentage of deposit you can afford will increase your mortgage plan options and may offer you a much better deal. The ability to contribute 15 percent or more to your mortgage will greatly increase your options.

Set-up fees The first type of fee you’ll incur is what’s known as a “setup fee,” which can be paid up front or added to your mortgage. This fee is an organization fee that is used to cover administration costs.

Expect to pay for a free property appraisal and survey. This fee depends on the value of the property and the survey level you choose. Choose the survey level that you think is most appropriate for the property, and keep in mind that a full survey, although more expensive, can give you peace of mind. Knowing that the property you are buying has no potential problems and costs after purchase can be invaluable.

Another possible fee is a search fee. This is a local council fee to look for if there are any future planning or local issues or issues that may affect the property’s value. This request is usually made by your legal representative and not on your own.

Lastly, legal fees must be taken into account. Your legal representative should receive payment for legal work performed on your behalf.

What mortgage to choose?

Well, there are two main types of mortgages available: a fixed rate mortgage and an adjustable rate mortgage (ARM). Fixed rate mortgages have fixed interest for a set number of years, after which the balance is paid in full or you can refinance to a new mortgage. The benefit of fixed rate mortgages is that you have a fixed amount to pay each month, so you know exactly how much you need to budget for each month. However, if interest rates go down, you won’t be able to enjoy the lower rate. ARM mortgages will fluctuate monthly based on interest rates. However, there is a minimum and maximum capitalization rate, so you have some security if rates skyrocket dramatically. With an adjustable-rate mortgage, most repayments are set much lower than fixed-rate mortgages, particularly at the beginning of the loan agreement. However, remember to budget for the increased rate after the initial adjustment period. You will need to take this into account in your refunds.

Now that you know the basics, you can start shopping around to see who offers you the best home loans available and the best mortgage company for your needs. It’s also worth using a mortgage calculator, which can be found online by searching for the keywords “best mortgage calculator.”