If you are looking for a mortgage or your remortgaging your existing home, then you may be concerned about the best way to navigate the information overload that is coming at you from all sides every time to put the word “mortgage” in your internet search bar.
1.) Research through Newsfeeds
A good mortgage is a complex mix of conditions, starting with the level of interest you will be paying, all the to how the lender will treat you when you can’t pay, after one year and when it comes to remortgage. In order to be able to effectively identify the mix of conditions that is best for your mortgage, it is important that you know what you are looking for. Changes in mortgages and mortgage offers are almost always accompanied with a press release from the lender, and so on, and the best way to catch up with what is happening in the wider market place is to subscribe to newsfeeds that will send you an email to alert you of mortgage news. This will help you get the context you need in order to accurately assess which deals are good and which deals are not.
2.) Understand the terms
There are a few choice phrases that all mortgages will use when offering you a mortgage and it’s important to know what these terms are. “Interest only” mortgages will mean that you never pay the loan back, you pay only the interest that the loan is accruing (which is good if you intend to sell or rent the home, as it fixes your payments at a low level, allowing you to profit when you sell, without having spent too much during the buy-period), “repayment” mortgages are when you repay over a particular number of years (usually 25 or 30). A “fixed rate” mortgage will fix the amount you pay over a certain time period and a “tracker” mortgage will mean that your repayments change, sometimes rising and sometimes reducing according to the Bank of England base rate.
3.) Read the conditions
Some mortgages, particularly new mortgage lenders, will offer very good rates to entice customers, only for those customers to find hidden charges and clauses later on when they try to do something different. Most mortgage providers will charge you a fee or a fine if you want to change lenders before your term is up, and others will charge you if you overpay, charge you if you miss a payment, and charge you to use them in the first place. Other lenders will give you payment holidays and consider you if you fall ill or need to go abroad for a period of time. In order to get a mortgage that will work for you, make sure you read all of the conditions to make sure that your mortgage gives you as flexible options as possible.
4.) Don’t get too fixated on interest rates
Differences of 0.01% between lenders is not enough to warrant a change, and so when you are shopping for a mortgage it is always better to choose the one that has the better conditions than the one that has the lowest interest rate.