Wondering how to get the best mortgage deal? Whether you’re looking for Manchester properties for sale or property for sale in Islington, getting the best mortgage deal is vital. Taking your time, shopping around and examining the terms and conditions carefully could make the difference between continuing to rent and getting on the property ladder.
Securing a home loan can be a tad tricky, particularly in the current economic climate. The days of 100% mortgages, interest-only mortgages and self-cert home loans are long gone.
The vast majority of UK lenders require borrowers to have at least a 10% deposit in place. The Government’s NewBuy scheme does only require a 5% deposit but that’s restricted to new build properties located in England.
According to Which?, in order to get the best mortgage deal you will need a 40% deposit.
However, if you have between 10% and 40% saved, it is possible to get a mortgage deal that works for you.
Our tips will put you on track to securing a home loan that’s best for your personal circumstances.
5 Ways to Get the Best Mortgage Deal
Save as much as you can towards a deposit
At the end of the day, the size of your deposit determines your monthly repayments and massively affects the type of deal you will be eligible for. You pay more if you have a smaller deposit.
Shop around and take your time
If you’ve seen the perfect property for sale in London, it’s tempting to simply get the mortgage sorted as quickly as possible and start the ball rolling before someone else snaps it up. There are huge differences between mortgage deals. Even a seemingly tiny difference in interest rates can equate to a surprisingly large saving when it comes to monthly repayments.
Don’t be rushed into agreeing to a mortgage. Remember, this is the largest financial commitment you’re likely to make in your entire life!
Look at the total costs and conditions
When you receive a mortgage offer in principle, it should outline the various terms and costs of the product. Read these carefully. Read them again. Don’t simply go by the advertised interest rate, even though it might seem attractive. Look at the fees and set-up costs as well. Some lenders keep these low, particularly for certain types of buyer. However, other lenders tend to sneak them into the finer print. If fees and admin costs are added to the mortgage, you will pay interest on them.
Look at the mortgage deal as an overall product. Offset pros against cons, just as you would do with a car purchase.
Don’t apply for credit whilst applying for a mortgage
Lenders take all your personal financial commitments into account. When you’re going through the mortgage application process, don’t apply for credit. It could adversely affect the outcome.
Make sure all your paperwork is up to date and at close hand
Lenders constantly change their criteria and require all sorts of information for mortgage applications. To make sure you get the best mortgage deal, check your credit history and keep all payslips and P60s close to hand.
Sources: Which?, BBC News.