Choosing your mortgage

There are many options available in terms of mortgage choice. Be sure to do your research to secure the best advisor for obtaining your mortgage…

Finances
In order for agents to take your enquiry seriously, we recommend that before you even start your property search, you make sure you are in a position to obtain a mortgage.

The best place to start is by undertaking a credit check on yourself in order to see what position you could be in financially and also to ensure there are no unpleasant surprises like that old phone contract you forgot to cancel. New rules have seen lenders become more stringent with lending money based upon what you earn against your outgoings. Sorting your finances before you start your search can also save you time when battling against all those unwanted sales pitches from the agents you register your details with.

The Deposit
The deposit required to purchase is usually a minimum of 5% of the cost of the property you are looking to buy, however the more deposit which is available, the much better the deal you are likely to obtain from your mortgage lender. A deposit of 25% of your property price would be an ample amount to ensure you were offered some of the best mortgage rates available.

With house prices having increased dramatically over the past few years, coupled with increase living costs, many first-time buyers have struggled to raise suitable deposits for a home purchase. To aid, there is a government Help to Buy Scheme which is a two-part scheme designed to help buyers get that foot on the property ladder. The initial part comes in the form of an interest free loan which can increase the percentage you can afford on your deposit, resulting in a better mortgage deal. The second part of the scheme offers your bank or building society a guarantee of 20% on your property value, again only with the input of 5% from the homeowner. This essentially allows a homeowner who can only afford a 5% deposit to secure a mortgage deal based on a 20% deposit of the property value. This latest scheme has helped those at the lower end of the deposit scale to secure better deals.

Sourcing a mortgage broker
Whilst there are a number of comparison sites which can be used to source mortgage rates, we would always suggest speaking with a qualified professional who is listed by the Financial Conduct Authority, meaning they are unauthorised to provide you with mortgage advice.

When making a final decision on a mortgage broker try and decide upon one whom
has access to rates across the whole market rather than one whom is tied to a group of lenders. Mortgage brokers whom are not whole of market are similar to those at your bank, they will only sell you a range of particular products meaning you may potentially miss out on better deals elsewhere.

Don’t be afraid to ask any broker you are considering using how they are paid and how extensive their range of offers are. Some mortgage brokers will work on a percentage fee (of the loan amount), and others will charge an upfront fee. Be sure to ask when the fee is payable, whether it is still payable if your purchase does not go ahead and also whether there will be further charges for re-mortgages and future home moves. Many brokers offer a life time service meaning their fees are a one off.

Other things to consider are….

  • How long have they been a qualified mortgage broker?
  • What qualifications do they hold?
  • Are they offering information only or advice?
  • What lender do they conduct most business with, and why?
  • What is their complaints procedure should you encounter an issue?

If you require any help, or just have a query, call us on 0330 043 0002 or email us at save@truuli.co.uk

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Written by Michael Fyffe