So you know what kind of house you want to buy, maybe you have even found the perfect roost to call home. It’s time to call in the mortgage broker and get to work figuring out exactly what kind of mortgage you can afford and which type will work best for your circumstances.
When this process begins, there are some things you will need to be aware of beforehand and others you will need to stay on top of throughout the process. It can be a stressful time, but following these top five tips for finding a mortgage will help everything move along smoothly.
Check Mortgage Fees
Before choosing your mortgage broker, you will want to do some research on what different brokers can do for you and to ensure you fully understand the process. Check their percentage interest fees that you will be liable for. Do your own calculations and factor in any and all other costs associated with the particular mortgage you want.
As there are quite a variety of different mortgages you can get, you will want to know how flexible the mortgage you are after will be. With some deals you will be able to overpay when you can afford it, and even underpay during a difficult month. Some mortgages even allow you to take a payment holiday which can allow you to afford an actual holiday or some other big expense. Decide which is the best option for your circumstances, although do bear in mind that those circumstances can change over the course of your mortgage.
Choose the Type of Financing
You will want to know in advance what kind of financing you require, whether it’s short term, long term, capital payment or interest only. There are also fixed rates and flexible rates, and all these options need to be decided upon according to what will work best for you. Flexible rates can often seem attractive but do carry a risk, while fixed rates can offer more security.
Have a Big Deposit
The ideal deposit size to give you as many options as possible is about 25% of the entire mortgage cost. That is indeed a lot, but the bigger the deposit you are able to present your lender with, the more faith in you they will have and thus the more options you will have when it comes to selecting the perfect mortgage for you.
Clean Credit Rating
High risk mortgages become harder and harder to acquire the worse your credit rating is. You can check your credit rating with any of the three main credit reference agencies (CallCredit, Equifax or Experian). They are pay account websites but you can check your credit rating for free by signing up for a month’s free trial and then cancelling before the subscription kicks in.
Obviously, your financial situation is going to heavily influence how easily you are able to find a good mortgage, but following these tips will help you get the best deal possible regardless of your circumstances.