The mortgage world has deeply evolved in the last 3 years. The type of mortgages available is much smaller than before, 100% LTV products are almost gone, and lenders in general are becoming a lot more careful. Gone are the days where lenders allow loans equal to 5 times your yearly income, and for customers with bad credits rating, having a mortgage has become extremely complicated. Despite the credit crunch, it is still possible to find some great mortgage rates on the market. We give you seven top tips to help you get the best mortgage deals:
1. Save for a larger deposit: while 90% Loan to Value mortgages might still be offered by a few mortgage lenders, the best mortgage deals are normally available on less than 70% Loan to Value mortgages. Try to you save as much as you can afford for your initial deposit.
2. Large deposits go a long way for remortgage deals as well: because of the collapse in home prices, you may well find that the Loan to Value for your property is greater than when you started your initial mortgage. An option could be to use the money in your saving accounts towards a greater deposit in order to get a better deal.
3. Know about your credit record: the mortgage applicants worst affected by the credit crunch are mortgage applicants with poor credit, also known as “sub prime”. If you have adverse credit, the rates available to you can be significantly greater as the mortgage lenders try to guard themselves against the danger of lending funds to a client with a poor credit record. Make sure you know your credit record and take corrective steps to bring it back on the right track.
4. Talk to a independent adviser: If you’ve got an unusual case, e.g. if you’re freelancing, it is really important that you speak to a mortgage adviser. A good mortgage advisor will talk to you to understand your personal situation and find out the top mortgage deals available for your circumstances.
5. Select fixed rate products if you would like to have security: fixed rate products guarantee that your monthly mortgage repayments will stay the same and won’t fluctuate with fluctuations in the Bank of England base rate. This security doesn’t come free though, as fixed rate products are generally more expensive overall than variable rate mortgage deals.
6. Go for a tracker mortgage deal for the best rates: tracker interest rates go up and down with the Bank of England interest rate. The mortgage interest rates offered for tracker mortgage product are usually lower than fixed rate deals. There is always the possibility however that the Bank of England rate could increase and cause greater repayments if you choose a tracker mortgage.
7. Be careful with the arrangement fees: the best mortgage rates typically have high arrangement fees. It is crucial that you calculate the total cost of your mortgage over the whole term, taking the arrangement fees into account, to find out what is the top mortgage deal for your circumstances.
buytoletmortgagesadvice 