Finding the Best Mortgage Deal
Finding the right mortgage deal for you should be right up at the top of your priority list when purchasing a property. We are experiencing difficult times in looming credit crunch meaning that 100% mortgages are no longer available and lenders require at least a 10% deposit before they will consider you. This is just the minimum deposit amount, but to get the better deals you will need a 40% deposit.
In order to find the best mortgage for you there are certain steps you can take to get you there.
Shop around and compare costs of mortgages and use their online calculators that can help indicate whether you are a viable candidate. Whether you have bought your property from a high street or online estate agents, they may be able to offer some advice about lenders or give some recommendations.
Seeking help through an independent financial advisor (IFA) can really be beneficial as they can search the whole market and obtain a list of mortgages that are suited to requirements. However, some of the best deals are only available directly through the lender so you should still do your own research.
When you search for mortgages, be sure to look into the total costs and not just the headline interest rate. You need to take into account all the fees you will have to pay before deciding to take the mortgage.
Avoid mortgages that have early repayment charges after the initial rate has ended. This way, you will not be able to switch providers without being liable for a charge. Also avoid mortgages that add the arrangement fees onto the mortgage and try to pay this out of your savings upfront, otherwise this will mean you will be paying interest on this amount as well as the mortgage amount.
If you are yourself selling a property and have asked an online estate agent to “value my home” you will be in good stead to know your budget and financial requirements for your new mortgage. It is also important to have a good idea of what type of mortgage you will be looking for, whether it is interest only or repayment, fixed or variable rate.
Fixed rate mortgages are easy to budget for, as you will pay the same monthly amount until the end of the agreed fixed period regardless of the interest rate changes elsewhere. Variable rate mortgages follow the lender’s standard variable rate, so your payments will reflect the change in the interest rates at the time. Tracker mortgages however track the Bank of England base rate which also means you will experience differing payments.
You also have other features to consider like cashback, where a mortgage deal will give you a sum when you take out their deal, but you should factor this into the overall cost of the deal before choosing one of these products.
Flexible mortgages let you over pay and under pay throughout the term duration, take payment holidays and make lump sum withdrawals. This means you could pay your mortgage off early and save on interest. Other types of flexible mortgages include offset mortgages, where your savings are used to offset the amount of your mortgage you pay interest on each month, and current account mortgages combine your account, savings and mortgage all into one so all your credit balances offset your mortgage debt.
The array of mortgages available can be quite daunting, but by seeking the correct advice and shopping around can certainly land you with the best mortgage deal.
Posted by admin on January 2nd, 2012 :: Filed under Uncategorized