Your Mortgage TOP TIPS

So what do you really need to know before getting a mortgage? How can you put yourself in a position to save thousands on your next loan? With these mortgage top tips, you can get the best, and most affordable mortgage for your next property purchase.

First Is Not Best

Taking the first mortgage that comes your way could be your biggest mistake. All mortgages are not created equal. Taking the first mortgage that is offered to you could make you pay thousands of pounds more than you should for your mortgage.

Go on a Shopping Spree

While shopping is normally not a way to save money, it is when you are shopping for a mortgage. Competition among mortgage lenders is fierce, and this helps you to find a good deal. Often lenders will offer loans at a slight loss to lure customers. You can benefit from this competition by finding a loan that costs less than it should.

Third Time’s the Charm

When you are shopping for a loan, compare the mortgage products of at least three lenders. Ask about application and valuation fees. Find out if you will be forced to pay mortgage indemnity insurance. Learn whether you will be paying interest daily or annually. Question the lenders about redemption penalties and lock ins. Finally, look at the lenders’ usual interest rates, as this will give you an indication as to how affordable your mortgage will be.

Small Lenders Are Great

Small lenders, such as building societies, often have better deals than larger banks. Do not be afraid to shop off the “beaten track” for your mortgage if you want a good deal.

Tell the Truth

Never lie when applying for or inquiring about your mortgage. Lenders will catch these untruths, and they will damage your ability to get the mortgage you want. Even if your credit is bad or something else in your situation may not be appealing to a potential lender, you can still get a loan.

Why a Loss Is Beneficial

Many lenders offer “loss leaders.” These are introductory periods on the loan where the lender will actually lose money because the interest rate is so low. You can benefit from these offers if you do not get tied into the mortgage longer than the special offer lasts. Take the offer, and then change loans when the offer expires.

Watch Out for Headlines

Headline rates are extremely low rates designed to tie you into a loan. These are always coupled with tie ins, or clauses that make it difficult for you to leave the loan. Before you sign up for a low rate loan, make sure you know what will happen when the special offer period is over.

Redemption Penalties Are the Enemy

Early redemption penalties are fees that you may be charged if you leave a loan early. These are to be avoided if possible. You do not want to be tied in to a loan for a long period of time. Sometimes you will get tied in to a loan for the length of the special offer or until just after the special offer ends. This may be the only way to get the special interest rate, which may make the redemption penalty worth it in the long run. Just make sure that you can get out of the loan within a few years if you need to do so.

Shorten up That Loan Term

If you can afford the monthly payments on a loan with a shorter term, take the shorter mortgage. The longer you are paying the mortgage, the more you are paying for interest. A 15-year mortgage will cost thousands less than a 25-year mortgage in the long run.

Shop with a Broker

The way you find your mortgage is, of course, completely up to you. However, using an independent mortgage broker who is not tied to any specific lender can help you find the best deal. Brokers have tools that allow them to shop all of the industry much more quickly than you can, and if they are working independently, they will work hard to get you a good loan deal. Using a qualified mortgage broker will save you money on your loan.