The first time buyer mortgage can be a daunting task, but it is not as difficult as many people think. That said, it is important that you know what to expect and there are many things you need to know. Understanding the whole process will make life much easier and give you the best chance of getting the loan you need.

We’ve pulled together some useful information and tools that will take you through the whole mortgage process – from understanding your deposit options and working out what you can afford, through to getting a Decision in Principle and applying for a mortgage.

A mortgage is a type of loan specifically used for buying a property or land. The amount borrowed is usually much larger than other loans, and – because the loan is secured against the value of your home – it comes with higher risk to the lender. This means that mortgages tend to have stricter application criteria than other kinds of loans.

The first thing you need to do is understand your credit rating and why it is so important. This can have a huge impact on what kind of mortgage lender will offer you a loan. If you have bad credit, you will find it very difficult to get a loan. You may also find that the interest rates are very high and that you end up paying more interest than if you had good credit.

Typically, banks and other lending institutions charge buyers higher interest rates when they are borrowing to buy a home than when they are borrowing to refinance. The reason for this is that lending-to-buy carries greater risk for the lender than lending-to-refinance.

When you borrow to refinance, it is not your first loan on the home. In fact, the first loan was made to you when you first bought your home. You used that loan money to pay the seller of the home. Now, you have paid off part or all of that loan but need more money again. So, your lender will simply be paying off your old mortgage with a new one (that’s why they call it a “refinance”) and giving you whatever extra money you need in cash.

But when you borrow to buy a home, the lender has no guarantee that their mortgage will ever be paid off because it is your first mortgage on the property. If things don’t work out and you end up in foreclosure, there will be no other mortgages for them to fall back on for repayment of their loan – at least not until someone else buys your house and takes out their own mortgage.