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How to get the best deal on your mortgage

Tue 21 May 2019

 mortgage

It’s practically step one on every homebuyer’s to-do list; get your mortgage approval so you know what your budget is for your property search. However, don’t just stick with your own bank or jump at the first mortgage which is offered to you; follow our tips to help you to get the best deal on your mortgage.

 

Deposit

 

Often the biggest hurdle to buying is the deposit itself, but spending more here should save you money in the long-run; the general rule is that a larger deposit will result in a more favourable rate as well as having a favourable impact on credit scores with lenders. With mortgages categorised according to their loan-to-value (LTV) – the percentage of the mortgage as a value of the property – the more equity you have, the lower risk you are to the bank.

Shop Around

It may seem like the easiest option is to simply take out a mortgage with the same bank that you conduct your personal accounts with; however, this will restrict your view on the mortgage market to a single lender. Looking around independently will help you to learn about the mortgage jargon and understand exactly what kind of proposition will suit you best. Comparison services will do a lot of the legwork for you, but remember that some of these require services charge, so if you can, find a no-fee broker.

Avoid bumps in the road

Having your documents in order seems like common sense, but a sure-fire way to having your application declined is to have inconsistencies in your paperwork. If you have recently married or changed address, for example, ensure that your documents reflect the correct details. Whilst you’re updating and verifying your documents, it’s certainly worth registering for the electoral roll as this has a huge bearing on the scoring system for lenders.

 

Fixed rate or tracker?

Put simply, a fixed rate mortgage locks in an interest rate for a specified time period, whereas a tracker mortgage has a variable interest rate which follows, or “tracks”, an external interest rate – frequently the Bank of England’s base rate. Deciding on which mortgage variant to take out depends on your financial situation; if you can afford to potentially pay higher mortgage amounts should the rates rise, then taking out a tracker mortgage could give you a lower starting rate to begin with. Alongside this, it also allows the opportunity that over the duration of the mortgage, you end up paying cheaper than if you had a fixed rate. If you need to know exactly how much you will be paying each month, then a fixed mortgage could be the best choice to avoid any unwelcome surprises – even if the initial rate is higher than other offerings.

Credit score

Having a great credit score is a huge help when it comes to getting an attractive mortgage rate, as lenders are keen to lend to those with a good history. Also, if you have a smaller deposit then it is essential to have an impeccable credit score, whereas having a larger deposit will result in more leniency if you have a lesser credit score (although you may struggle to achieve “high street” rates). If you want to cultivate the best credit score possible then there are a few steps you can take immediately; ensuring any outstanding debts on credit cards etc. are paid in full each month to show a strong payment history and clearing any outstanding debt are a good place to start.  

 

"Thank you all very much for selling Brittain Lane for us, everything went very smoothly and your help and advice was much appreciated. We highly recommend ehB. Many thanks."
Kelly and Andy

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We would like to take this opportunity to reassure all of our clients
- sellers, landlords, buyers and tenants that we are taking all reasonable
steps to protect the health of our clients and our team during the Covid -19
Outbreak. We are following the government and industry guidelines to estate
agents and lettings agents, and are conducting viewings and valuations in
person wearing suitable protection to include facemasks and gloves. We are
also available to offer virtual viewings and valuations should you require that
service. We would be happy to discuss these measures with you further should
you require any further information.
 
Leamington Office 01926 881144 or info@ehbresidential.com
Warwick Office 01926 499540 or warwick@ehbresidential.com
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