If you are thinking of stepping on the property ladder for the first time or are planning on taking the next step up, it is important that you do your research when it comes to applying for a mortgage. The UK average house price currently stands at £317,821 and in London it is a staggering £594,202, according to Rightmove. It is imperative that you sign up to the best deal to avoid spending more than you should each month on mortgage repayments.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it.
(1) Being loyal doesn’t always pay off
Don’t be under the assumption that your bank will be able to offer you the best deal. In the initial instance, do contact your bank to see what deal they can offer you, then, see what else is available from other providers.
Comparing different mortgage products can be time consuming. This is where using an independent mortgage advisor can be incredibly beneficial. They can look at range of different products that are suited to your needs and advise you on which is the best one for you.
(2) Don’t be seduced by low rates
It can be very easy to get reeled in by low interest rates. It is important to bear in mind though that this percentage does not represent the final figure you will pay.
There are many factors to take into consideration such as product fees, survey costs, application fees and exit penalties. To make it easier for consumers to compare mortgage rates, UK lenders must display an Annual Percentage Rate of Charge (APRC) alongside the initial interest rate.
The APRC is the total cost of credit expressed as an annual percentage (based on the assumption that you will keep the mortgage product for its entire duration, usually 25 years) and is an important figure to look at when choosing your mortgage.
(3) Don’t blow the budget
Mortgage lenders have a duty to check that you can keep up with the mortgage repayments. When you apply for a mortgage they will ask for a break-down of your monthly outgoings.
A few months (ideally 3) before you start the mortgage application process, start to organise and plan your monthly expenses.
Include details of your utility bills, travel costs, food bills, credit card / loan repayments and entertainment costs. These costs then need to be tallied up against copies of your last 3 month’s bank statements. Copies of these statements will be asked for by the lender.
(4) Don’t let past mistakes affect your future
Mortgage lenders will also carry out a credit check on you when you apply for a mortgage. If you have concerns about your credit score you can order your own copy. It’s advisable to do this at least 6 months before the application is made.
Things that can affect your credit score include late or missed credit card or loan repayments, CCJ’s or not being registered to vote. If you have previously shared or owned a property with someone who has a poor credit history, this can also affect your credit score.
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If you would like us to undertake a review of your current mortgage or compare various mortgage deals across the market, please contact Chris:
Tel: 01403 780 770
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