Purchasing a home is an exciting milestone in a person’s life. A not so exciting consequence of purchasing a home is choosing a mortgage. The biggest advantage you can give yourself to help the process go smoothly is to work with a mortgage adviser right from the start. They’ll be the best resource for you during the home-buying journey, but there are a few key areas you should know about to help you choose the right mortgage.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Deposit
The more money you can put down as a deposit, the more options you’ll have. Currently, a 25% deposit will help you to snag a great mortgage deal.
The best rates on the market however, require at least a 40% deposit. Recently, there has been a surge in the availability of deals for homebuyers with smaller deposits, but to have the best rates available, you’ll still need a healthy down payment.
Fixed rate
With continued promises of additional base rate hikes, and slightly higher rates (for the moment) than variable rate deals, a fixed rate mortgage remains a popular and sound choice for a mortgage deal. Fixed rates are great for borrowers that need stability and security and are willing to pay a slightly higher price to get that.
You’ll need to consider the term of the loan; two year, five year, and even ten year deals are widely available. There are benefits to each duration, so deciding which perks you’re looking for will help make your decision.
Tracker rate
Buyers more open to risk are likely to chance a tracker rate. Variable rate deals are very tempting as their rates are so low, but they’re volatile – rising and falling alongside the Bank of England base rate.
Borrowers considering a tracker rate should look for a deal with a rate cap. They must also ensure they have the ability to make larger repayments should their rate tick up a few more percentage points, particularly if they are locked into a deal with an early redemption penalty.
Standard Variable rate
After the initial period ends on your fixed or tracker rate deal, lenders move you over to the Standard Variable rate. Mortgage providers set these rates independent of the BoE base rate and may change drastically on a lender’s whim. It’s important to remember that your Standard Variable rate could increase or equally, decrease at any point in time without a countrywide base rate lock guarantee.
We understand how busy doctors and dentists can be without adding the complicated matter of purchasing a home.
At Dental and Medical Financial Services, we pride ourselves on being mortgage providers to medical and dental professionals, committed to helping you achieve your goals.
Need help to secure a low-cost mortgage?
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Dental & Medical Financial Services have been helping doctors and dentists with finding low-cost mortgages for your home and investment properties for over 25 years. Call Chris to discuss your options.
Tel: 01403 780 770