We all know that acquiring a mortgage is never easy – you not only have to be financially prepared – you also have to make sure that the mortgage is ideal for your circumstances and financial situation both for the present and the future.
But if you are thinking of acquiring a mortgage, how can you be certain that what you are getting is good for you? Here is your guide to getting the best mortgage deal for your needs and requirements:
Know exactly what you want
The first thing you have to ascertain even before you begin looking around for a mortgage is the type of real estate mortgage you would like. In this regard, you have plenty of options to choose from – each with its own merits, but each with its disadvantages as well. So you have to know which type of mortgage works best for your situation and financial capability. But first, you should get to know the different types of mortgages available.
The difference between interest-only and repayment mortgages
You should be aware that if you opt for an interest-only mortgage, you will have to have a separate arrangement which will cover the rest of your mortgage debt. This is because the payments you make for an interest-only mortgage only cover the mortgage interest. However, you can also settle for a repayment mortgage which, although it can be more expensive than the interest-only kind, allows you to pay off the whole mortgage amount as well as the interest owed.
For many experts, a repayment mortgage is the way to go, as it allows you to settle your debt in the best possible way. Also, many mortgage lenders won’t even offer an interest-only mortgage, anyway. And even if you find a mortgage lender who can offer you an interest-only mortgage, they would probably still want significant proof of a good plan of repayment and they may also put a limit on your borrowing amount.
The difference between a variable rate and fixed rate mortgage
Next, you have to decide whether to choose a variable rate or a fixed rate mortgage. The main difference between the two is that for fixed rate mortgages, you already know exactly how much you will be paying every month, whilst with a variable rate mortgage the rates will most likely fluctuate. In the past, a variable rate mortgage was usually less expensive than a fixed rate one – but times have changed, and fixed rate deals are much cheaper than before.
Be prepared for additional expenses
Acquiring a mortgage isn’t just about the deposit or interest rate – it is also about a whole other range of expenses, such as stamp duty tax, valuation and survey fees, the fee of your solicitor, and all other fees related to the mortgage itself. You have to be prepared for these additional fees as well.
Learn more about what is out there
Whatever type of mortgage you decide on, you also need to do research on the rates that are best for your needs. The rate you get will depend greatly on the property’s value and how big your deposit is. An additional word of advice: don’t just settle for what your current bank’s mortgage adviser can give you when it comes to mortgage deals. Look around and find out what other alternatives are out there by speaking with mortgage advisers who have knowledge on the whole industry and not just a smattering of small deals. A London mortgage broker such as the ones from Seacco should be able to present you with a host of choices when it comes to the best deals, as a London mortgage broker from this firm will typically have years of experience coupled with prime inside knowledge of the real estate market and the lending market in the UK.