Not so very long ago, getting any kind of mortgage seemed almost impossible.
Thanks to the banking crisis and the credit crunch, many mortgage providers, as well as many borrowers, found themselves with problems. For a while, mortgages were thin on the ground, and despite a record low bank rate, the deals that were available were not looking too generous.
Mortgage lending may now have recovered, and is in fact at its highest level since the financial crisis but taking out a home loan remains difficult.
Being too free with lending was one of the causes of the crisis, and lenders have been forced to change their ways. Banks and building societies have money to lend again, and it may even be possible to get a 100% loan once more – but they will expect you to provide plenty of documentary proof that you can afford to repay.
However, although you may be expected to explain how much you spend rather than simply prove how much you earn, there are now thousands of mortgage deals available on the market.
Here’s some tips about getting the best one for you.
Shop around – there are very competitive rates available
There are some very good deals available, as lenders compete for business again. Introductory rates are not the most reliable guide to the true cost of a mortgage, but some very exciting deals are available if you know where to look. With base rates low, mortgage providers can afford to offer low rates, particularly for borrowers with a big deposit.
Calculate your total costs
Low rates are not the only number you need to keep your eye on. The interest rate s important, but you need to take into account all the fees you have to pay.
Arrangement fees, mortgage valuation fees and insurance fees can mount up, and your low rate can suddenly seem a lot less attractive when you do your sums. And beware the temptation to add your mortgage fees onto your loan. It may be your only option, but be aware that adding fees onto your mortgage loan will result in you making extra interest payments for years to come.
Check the arrangement fees
A few years ago ‘arrangement fees’ were a rarity. Since the banking crash putting an upfront charge on your loan has become the norm. However, this is changing. As lenders compete for your business, they are starting to find that they might not need to charge you quite so much for the privilege of lending you money.
Avoid early repayment charges
Avoid mortgages with early repayment charges after the initial rate has ended so that you can switch to a better deal without charge at that point. Make sure your mortgage is portable so you can keep the same deal if you move house.
Get good, unbiased advice
If you decide to consult a Mortgage Broker, make sure you use a company or adviser that is regulated by the Financial Conduct Authority. Always do your own research in addition to speaking to an adviser. Compare your findings with the recommendations you are given.
Mortgage criteria has tightened massively over the past few years.
The application process has been redesigned to ensure borrowers can prove affordability, even in the event of a rate rise, and includes extra checks that mean increased application times.
A broker deals with lenders on a day-to-day basis, so they’ll know what the application process is like for each one and can tell you which lender can process your application with minimal delays.
They also know the background criteria that a lender has and can bring this experience to bear when advising you and processing your application.
You can start now
A Mortgage Broker is a good idea for anyone who wants a better mortgage, and if you are looking for Interest-only solution or lending into retirement, a qualified adviser is essential. To get the help you need, simply contact us.
Remember your home may be at risk if you do not keep up with the repayments for a loan or mortgage secured on your property.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances. For example, if the fee was 0.5% of the loan and the mortgage was £150,000, we would receive £750