- Personal Finance
Simple Mortgage Tips and Advice
Simple Steps To Take Before Committing To A Mortgage
For most people, the biggest financial decision they will ever take is applying for a mortgage so it pays to take the right steps before signing on the dotted line.
Choosing which type of mortgage.
Decide what type of mortgage will suit you and your lifestyle. If you want the assurance and security of knowing what your monthly repayments will pay, a fixed rate will suit, but if you want to benefit from the possibility of rates dropping then a tracking mortgage may be more appropriate if you are able to manage the fluctuations if the rates were to rise instead of fall. There are several different types of mortgage. Take your time in working out which would best suit you.
Decide on the length of the mortgage.
Do you want low monthly repayments which will result in a longer term, or would you prefer to pay a larger amount each month to decrease the term of the mortgage and will reduce the overall cost.
Understand the interest rates.
Make sure you fully comprehend how interest on your mortgage affects the amount you pay. Can you afford to pay more each month if the rates rise?
Do your research.
Don’t accept the first mortgage offered to you because it’s from the same bank as you have a current account with. There is a vast array of mortgages available at different rates and with different charges. Make sure you shop around and let the companies know you are comparing different options to encourage them to offer you their best deals.
Ask about services.
Ask what services are included free of charge and what the fees are for others and do your research on what they are so you know what you may have to pay for. If you don’t know, ask. Also, does the mortgage you are being offered include house and/or life insurance and does it have to be taken with the mortgage. You may be paying a higher premium for these products and could purchase them cheaper elsewhere.
Consider using a mortgage broker.
These can help do a lot of the work for you in finding a good mortgage but make sure they are able to access the full market. Make sure they are part of a regulated body. If not, don’t use them.
Don’t rush the process.
Take your time in choosing the right mortgage for you and don’t get pressured into accepting one before you are ready. Make certain you fully understand the type of mortgage you are considering accepting. Have anything you don’t understand explained to you and if you still don’t understand, ask for it to be explained again. It is a big commitment you are making and any decent mortgage provider will be happy to ensure you fully understand what you are undertaking.
Taking out a mortgage is a big commitment. It is worth investing the time and energy required to making sure you make the correct choice.
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