The 10 Commandments of Getting the Best Mortgage Offer
1. Invest Time in Preparation
Six months to one year is ideal. Mortgage is a long term commitment hence tolerance for errors should be set to minimum if not zero. In this period you should be able to know the amount you intend to borrow relative to the kind of property you wanted and your capacity to pay. You must also be able to know the different mortgage schemes in the market and studies the pros and cons in relation to your circumstance. The trend of interest rate and property prices must also be looked into for they would have significant impact in decision making.
2. Build a Good Credit History
The better your financial situation is the more willing are the mortgage providers to offer their best deals. Minimize your expenses and increase your savings and this should reflect in your bank account. Doing overtime work would prove very much helpful. Generally mortgage providers use a formula in determining the amount that they can lend you by multiplying a certain factor to your annual income but if they feel that you are managing your money properly they would be willing to go beyond the standard limit. Also ensure proof of ownership of your existing properties and other assets are available.
3. Shop For the Best Deal
Do your homework. Take as much information as you can about different schemes from different mortgage providers. Take advantage of the internet. Use the search engines and look for what is being offered in the internet and read reviews about them. Set appointment with different providers and discuss your circumstance and asked if what is the scheme would suit you best.
4. Do Your Math
Having gathered the data, sit down and compare and correlates them. Some scheme would give you very good figures initially but when you actually compute your expenses say one or two years after, you might find out that other schemes are better. Consider also the impact to your repayment when interest rate changes. Usually the amount of increase or decrease of interest rate is fairly the same, for example in UK it is always .25% more or less the current rate. Be able to compare different schemes numerically say after one or two years. (If you are not good at Math find a trustworthy person who could help.)
5. Special Offer
Most lenders offer some special schemes which are not currently available in their standard rates. The offer lasts only for a certain period of time but normally they keep on coming back. When everything is ready and yet there is no special offer in the market, maybe you might want to putt it off for a couple of months or so.
6. Hidden Charges
Note that when you are discussing mortgage with an advisor, he or she would only highlight the advantages of their product but if you study them more closely there could be some hidden costs behind that could have significant impact in your choice. Remember too that on top of your monthly repayment you will also be paying some insurance which are required by the mortgage provider. Furthermore, apart from the usual processing fee charge, you will also be paying for valuation survey of the property plus Solicitor's fee. Ideally you should choose a solicitor who offer a no sell no fee' service.
7. Negotiate
If you cannot avail of any special offer and you realty think that it is wiser to go ahead at the present time then maybe you would consider negotiating with your lender. Make up a scheme that would suit you then list your reasons why it is beneficial both to you and the lender and submit it to them for consideration. As long as it not very detrimental to them then you have a good chance to win your case.
8. Go for Non-Leading Brand
Non-Leading Brands usually have some every good deals compare to the more popular ones. While it is riskier to choose the well known companies in the trade going to the less popular ones sometimes could save you so much money. All you need to do is make sure that you have done your research work properly i.e. doing a thorough background check and reading reviews about them.
9. First Time Buyer
This is an advantage which you only have once so make the most of it. Most providers have special schemes which are only available to first time buyers. Remember too that when buying a property sellers are more willing to negotiate with first time buyers rather than those who are also selling property at the same time.
10. Put It In Writing
Once you have decided which mortgage scheme to take and such was offered to you, ask for a Certificate of Mortgage Offer from your provider. Note the expiry date of it and complete the buying process within this period. Avoid being in the situation when everything is ready and then your mortgage provider would not just lend you the amount that you need.