Are you in the market for your first home? Getting onto the property ladder can be very pricey. So, be sure to get things right when looking to get a great deal on your mortgage. Any number of factors can influence the rate you get from banks or mortgage companies when taking one out. However, the best deal cannot be found everywhere! We ran through some essential steps to take when trying to get the greatest possible deal on your mortgage. Check them out below!
Get Advice From Those Close To You
One of the first steps you should take is to seek advice from those closest to you. Your parents, for example, are likely to have had a mortgage. Chances are, they are still paying one off. So, if you want to find out a bit more about how the whole process works, then they are your best bet! They may also wish to help you buy the home by putting money in, thus making the whole process much easier. A lot of people are buying with the help of parents these days. Similarly, if you have any friends who work in the financial or accounting industries, they are also worth a try. Pick the brains of your Economics graduate friends, too! Anybody who has ever studied the financial market before is sure to give you some valuable insight into mortgaging a home. Making the most of the contacts that you do have is one of the most important life skills that you could have.
Save Up A Big Deposit
Your next step is one that you’re probably already taking, and that is to save up as big a deposit as you can. Saving up for a home obviously requires setting a lot of funds aside. This also means move savvy shopping when you do have to go out and purchase things. Be wary when doing your weekly supermarket shopping. Make sure that you get the best deals! Similarly, cut back on things such as holidays if you really want to save up for your home a little bit quicker. The bigger your deposit, the less your monthly repayments will be. That is the be all and end all of it. So, if you want to get the best deal on your mortgage, then start setting aside money today. A Help To Buy ISA may be suited to your needs. If you haven’t heard of one of these, then do some research. The government could give you additional money towards your deposit. This only works if you save using one of these special tax-free interest ISA accounts, though. It is definitely worth considering! The minimum deposit that you can put down on a home is 5%. However, you are going to get an awfully rubbish deal if you go with this approach. The interest rate on properties with a 5% deposit is extortionately high! You should be aiming to put down between 15% and 20% of the value of the property when buying in order to get a good deal on your monthly repayments. The more you put down, the less you end up owing, too. You’re far more likely to pay off your mortgage while you still have time to enjoy those extra years of your life with no massive financial strain.
Have A Stable Income
Another thing that is important to ensure is that you have a stable income. Banks and mortgage companies simply will not hand out a loan to a person with no stable job or income. Therefore, if you are unemployed and simply living off a big sum of money at the moment, then you will seriously struggle to get yourself a mortgage, especially one that offers you a good deal! This is tricky when it comes to things like freelance positions. You will need to prove via invoices or contracts that the work you are doing is regular enough to sustain your mortgage repayments. It is often tricky to get the bank on your side when it comes to this form of earning. However, fear not. There are plenty of tips available online for getting a mortgage when the work you do is on a freelance basis. For those who are employed in a permanent, full-time role, you can rest easy. Banks and mortgage companies are sure to look far more favourably towards yourselves.
Improve Your Credit Rating
Your next step is just as crucial as having a stable income, and that is getting a good credit rating. Our credit scores often define us in the eyes of banks and mortgage companies. You will be severely background checked before being offered the terms of a mortgage. So, if you have a dark financial history, then you need to go and resolve it by upping your credit score. There are many ways to do this. If you’re in serious financial debt right now, and your credit score is awful, then it may be worth seeking professional advice. Companies such as Sky Blue Credit can help you out in this scenario. Also, if you’ve never had a credit card before, then strangely, this is the time to get one. Make regular purchases on it and pay them back immediately, either early or by the due date of your credit card statement. If you can manage that, then you will be looked on more favourably. Banks love clients who keep up with their monthly repayments and are more inclined to offer such people a better deal. Keeping up with credit card payments is a great way to show that you are fit to repay a mortgage for an extended number of years. So, do something about it to improve your chances of getting the best deal on your mortgage – clear up your credit rating!
Your next step is quite an obvious one. Be sure to shop around all of the banks and mortgage companies both online and in your local area to ensure that you find the best rate on your mortgage. As with anything, shopping around will only make you more aware of what is a good deal, and what simply isn’t. Price comparison sites are designed for this! When you’re in a position of power and knowledge, you can make a more informed choice about which mortgage provider is best for your needs. It is also important to buy at the right time. What this means, is that interest levels often fluctuate. So, it is important to try and get on the property ladder at a time when interest rates are at their lowest. This will mean that you can take out a fixed-rate mortgage and end up saving yourself a lot of cash.
Hopefully, this advice will help you get the best deal on your mortgage. Follow these great tips to ensure you get a great deal and continue to maintain sound finances. Let us know in the comments section below if it helped you out at all!
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