Purchasing a home can be a huge investment and ensuring that it is worth the investment is just as important. You want the buying process to be smooth and stress free. In the past, you would just find a mortgage online, a quick call and filling in a form. Nowadays, lenders have tightened their criteria making the requirements a little more complicated.
However, this should not deter first time buyers from applying for a mortgage; there are things you can do that might increase your chances of a securing a mortgage and getting the best deals.
Perhaps the first and most important tip is to make sure you know what deals are out there. Avoid going for the first deal, you may find out that you missed out on a perfect deal. Once you have researched a good selection of mortgage deals, you can them compare them based on quality of service as well as cost and benefits. The first port of call to find out what deals are on offer is to contact your bank or building society, especially if you have a been a long-time customer.
Make yourself look like you are efficient at repayments. Lenders like to see someone who is excellent at money management. This can be done through providing the information that they want to see. Get on the electoral role; this will help the lender identify you as a real person with a real address. Build up a credit history as well, lenders want to see examples of you being able to borrow money and pay it back on time.
This will also involve on keeping an eye on your credit score. Many reputable companies online offer free credit reports. A good credit score will improve your chances of securing the best rates.
Discuss the lock-in period
Most offers from lenders have a time limit, known as the lock period. During this period, the interest rate is locked in. After that period has ended, the interest rate could be higher or lower depending on the financial forecasts. Discuss your target close date with each lender and find out about the different charges for loan-lock periods.
Find out about fees
As the interest rates are not the only thing you will be paying back with the mortgage, you will want to find out about other fees such as early repayment, loan administration or processing. In most cases, you cannot avoid them, but it can help you compare which deals are better and cheaper for you.
Understand the various types of rates
If you dive straight into a mortgage, you may find yourself in over your head. It is not as straight forward as buying on mortgage. The four types of rates include; fixed rate, Standard variable, Discounted and Tracker rates. Each one comes with advantages and disadvantages and understanding how each one works can be advantageous when finding a rate that can suit you.
In conclusion, it is important that you do your homework when shopping for a mortgage. Speak to a advisor to see if they can offer the best deal as well as your bank advisor. Remember to keep an eye on your credit score and when it comes to filling out the application, be honest.
By Harry Price
Harry Price living by the sea – he loves it, as it gives him inspiration for his writing but also great for improving his surfing skills.