Getting a Mortgage

For many people they think that finding the right property wth estate agents such as Right Move is the hardest part of buying a home, but then they have to navigate the complex mortgage market to find the right product for their needs! Getting a mortgage is a complicated business nowadays, with thousands of different products to choose from, pus many companies competing for your business, banks and building societies like First Direct, Yorkshire Bank, Cheshire Building Society, the Co-operative Bank and the Halifax all advertise mortgage deals and offers which seem enticing, but how do you choose?

The biggest ongoing cost when buying a property is the mortgage, which is really just a loan secured against the property. You can’t sell the property without paying off the mortgage first plus if you don’t keep up the repayments then the lender is entitled to repossess the property in the worst cases. It is therefore vital that you that you secure a mortgage which is appropriate for you circumstances before searching for a property. By securing the mortgage first, when you find the right property, you can move on it fast without being beaten to the punch by another buyer.

The best mortgage deals are available to people who put up a large deposit, at least 15% of the property’s value. This large deposit means less risk for the lender so they can offer more attractive rates. If you already have a good relationship with your bank or building society, you can see what they have to offer. But as mortgages are the biggest purchase most of us will ever make, it is important to shop around before making a commitment. Mortgage lenders will assess your mortgage application based on your credit history and other information supplied in the application process. Those with less than perfect credit rating might be able to get a Sub Prime Mortgage deal, but this will mean a higher mortgage rate.

You need to be comfortable with the level of mortgage you are taking on. Be realistic about your lifestyle and the sacrifices you may have to make to keep up mortgage repayments, consider what would happen if your circumstances were to change, if you lost your job or became ill, or if interest rates go up. Once you have researched the mortgages on offer, you can compare mortgage quotes from different lenders on a like-for-like basis. Once you find the best deal, the next stage is to get a Mortgage in Principle agreement from a lender. This simply means that the lender is prepared to lend the mortgage to you subject to approval of the property you choose.