When it comes to getting a good home mortgage, it pays to invest some time into knowing what you need. A home mortgage is as easy or as difficult to arrange as you make it. The more that you can do to learn about your mortgage options, the better.
We’re going to closely explain what a home mortgage will do for you, and why it matters to take into account the following considerations. If you do that, you are much more likely to avoid any headaches brought on by the mortgage!
Arranging the borrowing cost
First off, work out how much you can actually afford to borrow. You might find your dream home, but nothing hurts more than your dream home is out of your financial reach. This is why we recommend that you try and look to find out what you can actually get.
The ratio that you want to work out then is known as your Loan to Value ratio. This is essentially how much you can borrow versus how much you need for a deposit. So, if a property was to cost you in the region of £100,000, and you could get £90,000, you would need £10,000 for the deposit.
Learning your mortgage rates
Just as important as the actual lending cost is the rates that you will pay. You will find that rates can vary quite wildly, and it can make a big difference to what you will be paying on a monthly basis. If you look beyond the monthly rate, though, you might notice some less visible fees waiting for you – each of which will be pretty expensive. Since they are often linked to the rates of the central bank, pay attention to banking lending rates.
Will you stick around?
Not everyone who takes on a home mortgage wants to stay in the one place. This is why we recommend that you consider if you will stick around: if you are someone who likes fresh experiences, consider a portable home mortgage.
This can save you a lot of money, and make it much easier for you to get on the move. It means that you can keep the mortgage with the same lender, giving you the chance to waive things like early repayment fees if you choose to move. Otherwise, expect pretty extensive early repayment fees for moving on early.
Don’t forget insurance costs, too!
When working out all of the costs of your mortgage, take into account the cost of mortgage-related insurance costs, too. Often higher than one might expect, they can add a not-insignificant amount to your outgoing costs on a monthly basis.
From home building insurance to home contents and payment protection insurance, you can have numerous forms of insurance that you must take on. Also, consider things like life insurance; when pricing up how much you can afford on a monthly basis, these prices will always become a sticking point.
When you go through the process of getting money for a mortgage, remember to have a valuation carried out. This matters a great deal as it can go some way to making sure you can take out the right sum from the bank.
The lender will take a look at the property and then determine if you have suitable security for the loan. Valuations are another cost but are worthwhile as it can help you to get the most accurate rate and valuation for the property. A survey can spot shortcomings in the property that you might not have been told about beforehand, saving you valuable costs on dealing with unforeseen repairs.
If a home appears to be a little too cheap in relation to the market average, it pays to take some time to consider why that might be. Often the reasons come from some significant hidden damage.
Making the right choice
As ever, there is no real ‘right answer’ when it comes to this subject. We recommend that you take the above into account, though, as it will play a leading role in making sure you do the right things when getting a mortgage. The more of the considerations above that you take into account, the more likely you are to get a mortgage that you can be happy with and proud of.