How to Get Best Mortgage Deal
Buying a house will be the biggest purchase most people make in their whole lives, and learning how to get the best mortgage deal will make a very big difference to your long-term financial position.
Because it is such a long term expense, any small savings will add up over time creating a significant amount. Therefore it is important to do your research and to make sure you know how to get the best mortgage deal.
What is a mortgage?
A mortgage is a legal agreement where a bank lends money to the person who is taking out the mortgage. The amount loaned is then paid back with an interest rate later on throughout the mortgage period.
The title of the property is transferred to the name of the lender until the loan is paid back. This will serve as a security to make sure that the loan is paid back.
Taking out a mortgage can be a good move, but getting a bad mortgage deal can also be detrimental, thus there are a few things to look at to make sure that you get the best mortgage deal.
What makes the best mortgage deal?
The number one thing that makes or breaks a mortgage deal is of course the interest rate at which you need to repay the loan. Getting a lower interest rate will save you a lot of money over the duration of the mortgage.
There are also other considerations like mortgage fees. Some lenders will charge higher fees than others and this will also play a part. Common fees can include legal fees, arrangement fees and valuation fees.
It is vital that you look at all the costs when looking for the best mortgage deal as some lenders will offer a lower rate to draw your attention but then they will add high fees which will make them more expensive than other options.
There are also considerations which are not financial at all like for example the reputation of the lender. This can play a part when you are looking for good customer service and significant transparency.
What can you afford?
It is important to do your calculations ahead of time to figure out what you can afford. This will determine how much money you can borrow and what interest rates you can afford.
This includes not only the current interest rates but also taking into consideration any future changes to the interest rates.
For this reason, you want to make sure you are comfortable with the financials so that you do not put yourself in too much of a tight spot.
Look around for the best mortgage deal
Not settling for the first decent offer is essential as you search for a good deal. There will be many banks as well as other private lenders who can give you a loan on your mortgage.
They will all have different terms, rates and fees. So it is a good option to shop around and see where you can find the best mortgage deal.
Be aware of any hidden costs or extra interest
As mentioned above, any hidden costs can come back to bite you. For example, the mortgage fees could be included in your loan amount and thus need to be paid back at the interest rate.
This can increase your instalments and cost you more money over the long run. Best to have it all laid out so that you have a clear picture of what you will pay.
Also, there could be something like an early payment fee. This will charge you if you pay back the loan faster than agreed. You would like the lender would want this, but then they lose money due to less interest being paid.
Get professional advice
As with most things, getting unbiased advice can be the best thing to do. You can also do all of your own research to educate yourself as much as possible and we always advise you to do so.
But a professional is just more in tune with how things work and with what to look for in the best mortgage deal. They can help you see what you need to look for and what you should go for.
Getting a good deal will really make all the difference and whether you go for professional help or for self-education, we hope this article has helped guide you towards getting a good deal on your mortgage as you navigate this big financial step.
Find a great deal on your next mortgage
Whatever term suits your budget we can help you find a solution. Ratewise can match you with a local broker that knows how to help—regardless of your credit score! Get pre-approved today.