Mortgages are a big financial investment, and with so many different mortgages on offer, it is vital that you do some groundwork in order to maximise your chance of finding the best deal.
These simple tips are a great way to get on the right track.
1. Know your financial situation
Be aware of your financial standing and credit rating before making any applications. Lenders will review your credit report before making a decision on what kind of deal they offer you. You should check your credit report is accurate and up-to-date before meeting with any mortgage lenders.
2. Improve your credit report
If you've got a bad credit history, all is not lost if you take steps to improve it. Paying your monthly bills on time, for example, and taking steps to improve your credit rating will help you come across as a more favourable candidate.
If you are getting a mortgage with someone else, they should also check their credit report.
3. Understand the mortgage process
Taking out a mortgage can be a complicated and long process. Start by researching the mortgage market and getting a good understanding of how it works. Read up on key mortgage terms, and get to know the difference between fixed rate, flexible and other mortgage types.
4. Always read the small print
Mortgages can look identical at first glance, but special mortgage conditions and various costs involved over the years of the mortgage can have a big financial impact. Ask questions, and read all the documentation. Yes, this can be quite a bore, but you'll be better off for it.
5. Avoid large purchases
Before going to see a mortgage lender, clear your credit card and loan debts as much as possible. Your total amount of debt is a key factor in getting a mortgage, so avoid taking out additional debt or making large credit purchases until after you have purchased your home.
6. Don't leave footprints
Ensure that lenders understand that you are only seeking a quote for a mortgage, otherwise your credit report will show that you are making multiple credit applications. These could be viewed as lending rejections and harm your chances of getting a mortgage.
7. Take your time to compare
It may seem tempting to take the first mortgage offered to you, but like most things, it's always a good idea to shop around and compare mortgage deals. Approach a number of different lenders, and look at a range of mortgage options.
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Did you know?
- Gross mortgage lending reached a new record of £34.2 billion in June - up from £31.4 billion in May
- In May, a record 60% of first-time buyers were liable to pay the tax, up from 52% in May 2006
- The number of home movers that paid stamp duty also reached a new record at 86%, up from 82% in May 2006
Source: Council of Mortgage Lenders
- Total credit debt for the UK was £53.5bn in June
- Bank and building societies hand out approximately £1bn in mortgages on a daily basis
Source: Credit Action
See also
- Credit check - check your credit report before applying
- Mortgages - compare mortgages & save on your biggest outgoing
- Mortgage glossary - become familiar with mortgage terms
- Property valuation report - buy or sell property at the right price
noimot (Southwark), on 22/05/2008 at 01:11
Advice wasnt bad alot,anyone seeking to buy a mortgage needs all this advice most especially read to understand.Never rush urself take your time to compare.
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