Tips
for Getting a Good Mortgage Deal
In this three-minute read, we look at how homebuyers
can get a good mortgage deal.
For
most people, a mortgage is the biggest loan they’ll take out in their lifetime
so, understandably, they want to land the best deal.
But
with hundreds of mortgage products on the market, it’s easy for homebuyers to
feel overwhelmed or confused.
There’s
a lot to consider, including:
·
Interest rates (they’re currently low – but won’t
be forever).
·
The term (most mortgages last 25 years, but some
can stretch to 40 years).
·
Whether to go fixed (where the interest rate is set
for a certain number of years) or variable.
·
Mortgage fees. Lenders can charge valuation,
arrangement, early repayment, or missed payment fees. Now, you won’t
necessarily be hit up for all of these fees – each deal is different – but it’s
important to know what you’ll be charged.
·
An interest-only mortgage (you pay back the
interest, not the capital) versus a repayment mortgage.
Where
to start
Given
a mortgage is such a significant transaction, most people seek advice from a
lender or independent financial adviser.
Talking
to your bank or building society isn’t a bad idea (after all, they’ll know
quite a lot about your financial situation). But this approach does have a
significant limitation: the lender will only advise you on their
products.
For
this reason, many people go with an independent mortgage adviser to get a broad
picture of the overall market.
If
you use an independent mortgage adviser
Always
choose an experienced adviser with a good track record (ask friends or family
for a recommendation).
Also,
be aware that some mortgage advisers charge an upfront fee; others get paid a
commission from lenders. So it’s best to know from the outset what the
situation is.
Other
mortgage tips
If
you’re re-mortgaging:Even if you think you know what you’re
doing, it’s still worth getting advice as the market has changed significantly
in the past 12 months due to Covid-19.
Get
your paperwork in order. To make an application, you’ll need three months
of bank statements, three months of payslips, ID, a P60 if you’re employed, or
copies of your accounts if you’re self-employed.
Credit
check caution: Avoid making multiple mortgage applications
at the same time (either online or in-person), as this can negatively impact
your credit rating. A single application won’t do any damage, but several ‘hard
searches’ – when a lender takes an in-depth look at your credit history – will.
Essentially, the system assumes that you’re trying to obtain several loans
simultaneously and are in financial difficulty.
Be
honest. Like it or not, most, if not all, of our
financial activity is tracked online. If you lie in a mortgage application,
chances are you’ll be found out.
For
more advice about buying a property, get in touch with us here at Marlborough
Homes. We’re here to help.
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