Five tips to remember when buying a mortgage
With currently around seven million mortgages in the UK and approximately 64,000 new approvals each month, it’s clear that the Britain’s love affair with home ownership is as strong as ever.
A recent survey found that 80% of people would prefer to buy their own home rather than rent and, as a result, the mortgage market is strong, with around £3.3bn loaned in October last year alone.
If you’re one of those hoping to get onto the property ladder – or looking to move onto another rung – here are FIVE tips to buying a mortgage:
Do your research and take advice
There are lots of different mortgages available but many buyers aren’t aware of it – every day we hear form would-be buyers who believe their dream of owning their own home is over because they have been turned down by the first lender they have approached.
That’s why you should always look around and always ask for help from independent advisers who have access to the whole market and can track down the right deal for you.
Don’t assume having a bad credit history means game over
Many people think that having once they have been declared bankrupt, for example, they will be barred from getting a mortgage. That is not the case – nor is it game over for anyone who has an adverse credit history with defaults, County Court Judgements, arrears and late payments.
Finding mortgages for people in this situation is our speciality and we use the access we have to the whole market to their advantage. Yes, you may have to pay a slightly higher interest rate, but compared to the rates available five years ago, the deals available for adverse credit mortgages are extremely good.
Look at all the options open to you
Many people find getting the money together for a deposit is a sticking point, but is there another way to get the cash they need? Can your family help? An increasing number of people – 300,000 buyers last year – are doing this, with the majority approaching their parents, commonly known as the Bank of Mum and Dad, or BOMAD.
Lenders are catching onto this, hence the influx of parental guarantor mortgages, family offset mortgages and family deposit mortgages, all designed to help buyers secure their dream homes by using extra help from their relatives.
Get your finances in order
Lenders will ask for proof of your income and your expenditure so that they can assess your ability to keep up with repayments should interest rates rise. Your outgoings, lending history and credit-worthiness are all taken into account so, before you apply, get your finances in control. If you’re unsure what to do, take advice.
Don’t just file away your new mortgage paperwork and forget it
Mortgages are no longer for life. By moving to a new deal when your initial deal comes to an end you can save thousands of pounds over the lifespan of your mortgage so be smart, be persistent and, as ever, with an ever-changing world of mortgages to choose from, get help from an expert.
If you would like to know more or want help, ring Finance Advice Centre on Freephone 0800 103 2655 or 012332 821 340.