It starts with your credit score and report. Your credit score and report are a crucial part of getting a great rate on your mortgage, and you should make sure that you know what yours says about you.
Pay the largest deposit you can afford. The larger your deposit, the less you need to borrow and the better deals you’ll be offered.
Should I compare mortgage deals by interest rates?
When you’re comparing mortgages, the interest rate of each deal is probably the most important factor. It can make a huge difference to your monthly and annual payments, as a mortgage interest calculator shows. However, the lowest interest rate doesn’t necessarily mean that it is the most cost-effective option, as they can sometimes have high product fees. For example, it’s less per month than one with a higher interest rate, but you’ve had to pay £999 upfront in order to get the mortgage. It is the role of your mortgage adviser to determine which is the best and most appropriate product, after an in-depth discussion around your needs and circumstances.
Naturally, a lower interest rate will save you money – but while you can simply rank every mortgage by interest rate, it can be better to separate them out based on what kind of mortgage product you’d prefer.
What are the different types of mortgages?
Mortgages tend to be categorised according to the way their interest rate works, and there are four main types:
- Fixed-rate mortgages are, unsurprisingly, fixed for a set period of time – usually two, five or ten years. There are even 15 year products coming into the market.
- Discount mortgages have an interest rate that’s pegged a certain percentage below the lender’s standard variable rate (SVR – see below), again for a set period. Lenders can change their SVRs whenever they like, meaning your interest payments could vary from month to month.
- Tracker mortgages’ interest rates are pegged at a certain percentage above an external interest rate – usually the Bank of England base rate. Again, this means they can vary.
- Standard variable rate mortgages are what you’ll be moved on to at the end of your introductory deal period. Mortgage lenders all set their own SVRs and can change them whenever they like. SVRs are usually much higher than fixed, discounted and tracker rates, so it’s wise to remortgage – switch to a new deal – before being moved onto the SVR.
What are mortgage fees?
Interest rates aren’t the only thing you’ll need to consider when comparing mortgage deals. Fees can make a big difference, too, and there are several different types you should watch out for:
Arrangement fees – sometimes known as booking fees, these are paid to the lender for setting up your mortgage. They vary between mortgage providers, ranging from free to £2,000. Sometimes they will be charged as a percentage of your loan.
Valuation fees – your lender will need to conduct a valuation to check the property is worth roughly what you want to pay for it. This is just to protect them, not you, and some won’t even show you the results – but they may still expect you to pay for it. You can pay extra to have more of a survey completed – speak to your adviser about the different options.
Legal fees – when you’re remortgaging to a new deal but staying in the same home, some lenders will offer to cover the cost of the conveyancing work involved in switching. Otherwise, you will need to cover these costs.
What are APRCs?
A mortgage deal’s annual percentage rate of charge (APRC) is a calculation of how much you’d pay if you stuck with the deal for its entire term, until you’d paid off the mortgage in full.
This means the APRC incorporates the initial rate and fees but also the SVR (standard variable rate), which you’d be moved onto at the end of the initial deal period. While it can be interesting to see how deals compare on this measure, the APRC won’t be that useful if you’re planning to remortgage when your initial period ends.
Should I choose a mortgage offering cashback?
Many lenders now offer cashback and other incentives to make their deals more attractive to potential customers – but you should always weigh up whether a quick injection of cash is worth it if it means paying back more in the long run.
Banks vs building societies: which offer the best rates?
When it comes to mortgage-hunting, many people start by talking to their own bank – but it would be a lucky (and unusual) coincidence if that was where the best deal was to be found. In fact, it’s often not banks offering the best deals at all, but building societies – and often ones that you won’t see on your local high street.
That’s why it’s a good idea to use a mortgage adviser, who can look at the whole of the UK mortgage market for you and help find you the best possible deal. After all, if you’re only looking at one lender – like your bank – how do you know you’re getting the best deal out there?
Who is the best mortgage lender?
There’s no real answer to that question, because obviously the best mortgage is different for everybody as everybody needs a different mortgage provider; and so everybody will have a different ‘best’ mortgage for them!
However, the one thing we can say for certain is that we’ll help you find the best mortgage offer, by using our years of expertise to match you with lenders who’ll make you their best offers. We do this by putting together a ‘fact-find’ where we find out more about you, in order to give you the best mortgage advice.
So you could say that the best mortgage lender is the one that you go with as being the best for you!
How much mortgage can I afford?
The amount of mortgage you can afford is based on your yearly income and any financial commitments you already have.
Most lenders will look at 3-4 times your annual salary as being the ceiling you can borrow.
Whether a lender will let you borrow this amount though will also depend on your credit history and current monthly outgoings. The lender will let you know what your borrowing amount is, but the adviser will search through different options to ensure its the best mortgage for you.
How do I apply for a mortgage?
Before you start any mortgage application, talk to us and let us make sure your application is as strong as it’s going to be, and that you’re applying for the right type of mortgage for your circumstances. READ MORE: About Your Mortgage Application
Our team of expert advisers will make sure all of your history and financial information is taken into consideration to give you the best possible advice and to find you the best mortgage we can. We’re an independent adviser, so we can offer advice on the whole UK mortgage market, not just a handful of lenders. This means you’re going to get the widest choice possible, and we’re here to help you make sense of all of your options.