If you’re looking for a mortgage, or if you’re looking to switch lenders, it’s important to do a thorough investigation and carefully consider your key financial decisions.
Here are 10 MoneySuperMarket tips to help you navigate your mortgage maze …
- Please understand your budget. Go ahead by calculating your budget. List all monthly costs and see what’s left. Remember that it is always better to leave some money for unexpected costs.
- Determine the type of mortgage you want. At a fixed rate, monthly repayments remain the same for the duration of the transaction, which helps with budgeting. For floating interest rates, the monthly repayment amount may change depending on the interest rate.
- Compare the entire transaction. Don’t just look at interest rates, take into account mortgage fees and early repayment fees.
- Consider consulting with a mortgage broker. The MoneySuperMarket website (www.moneysupermarket.com/mortgages/mortgage-advice) has a guide to mortgage advice.
- Prepare the documents. Include bank statements and pay slips, ID, address proof, P60, and other income proof documents such as children’s allowance.
- Your credit score is important. Before applying for a mortgage, get a copy of your credit report. If it doesn’t look good, there may be an easy way to boost it. For example, make sure you are on the electoral list and close any credit card accounts that you no longer use.
- Show consistency with your work. Lenders often want to see you stay with your employer for quite some time. We recommend that you have been in an existing job for at least 3-6 months before applying.
- Please deposit as large a deposit as possible. The more you can put, the greater the mortgage options you have. Lenders book their best rates for those who have large deposits.
- Minimize your debt. Before you apply for a mortgage, try to reduce the debt you have-this will help show that you are responsible for managing your money. It can also mean that you can borrow more when it comes to calculating the lender’s affordability.
- Consider LTV when taking out a remortgage. Carefully check your LTV or loan-to-value ratio when taking out a remortgage. If you are approaching a low threshold, consider whether you can pay a small lump sum to move on to the next threshold. This will allow you to take advantage of a variety of new transactions at low interest rates, potentially saving thousands of dollars over the entire trading period.