Securing a mortgage is one of the most important aspects of buying a property. Bullock & Lees recommend that you talk with Gary Clarke of Oakwood Independent Mortgage Consultants – an appointment to speak to him can be made through our office; Chris is generally in the office at Seabourne Road on Wednesdays and is available for home appointments also.
If you already have a relationship with a bank or building society, see what they have to offer. Home builders and developers often have attractive mortgage deals.
If you are a council or Housing Association tenant, are on a low income or a key worker there may be other options available. You may also be able to get help from your parents if they are prepared to act as a guarantor on a mortgage.
While a lender will happily work out what they think you can afford, remember you need to be comfortable too. Make sure you will be able to deal with unexpected extras that crop up. Key questions to ask yourself are:
- Can I continue to live the lifestyle I want if I take on this mortgage?
- What if my circumstances change, eg.if I want to take a career break to study, have a child or have to look after a sick relative?
- What happens if I lose my job?
- What happens if interest rates go up?If any or all of these things happen can I still keep up the mortgage repayments?
Budget for rises in interest rates - for example, for every 1% increase in the interest rate on a £100,000 mortgage the interest payment alone jumps by around £83 each month.
Once you have read through all the mortgages on offer, you are ready to compare mortgages. Here are some tips:
- If you've got quotes from different lenders make sure you compare them on a like-for-like basis looking at payments, charges and flexibility.
- Ask about the term of the mortgage. Most mortgages are 25 years in length, but you can choose a longer or shorter period if you wish, depending on what you can afford and how quickly you want to be debt free.
- At the end of any special offer periods, you may be switched onto the lender's standard variable rate. So at the end of the period, remember to ask your lender if they have any better products available and don't be afraid to shop around to get the best deal.
Once you think you've found a mortgage deal you like, the next step is to get a Mortgage in Principle agreement from a lender. To do this they'll need to do a full credit check on you. As each check leaves a "footprint" on your credit file, it's best not to do too many as it can hurt your credit rating.
A Mortgage in Principle will show agents and sellers that you are a serious buyer with a mortgage lined up - and put you a step ahead of other buyers. Your mortgage company will provide a summary of the mortgage agreement, called the Key Facts Illustration showing the total cost of the mortgage, the interest rate, whether there are any penalties for early repayment and any other special conditions.