Taking out a mortgage is an important long term commitment, and those looking at mortgages often have many questions to ask about this type of finance. Below you will find a selection of frequently asked questions with relation to mortgages:
How will I know what sort of mortgage to go for?
In order to determine what sort of mortgage to opt for you need to learn more about the different products on the market and match those to your needs and circumstances. For example, if you do not want the hassle of fluctuation repayments then a fixed rate mortgage may be the best choice for you. If you are still unsure after learning more about the different mortgage products available then it is well worth speaking to an independent financial adviser, who may be able to point you in the right direction and offer valuable support.
What is the best way to find a good deal on a mortgage?
Compare, compare, compare! Interest rates, terms, and repayment periods can vary widely from one lender to another, and in order to get the best mortgage for your needs you need to keep your eye on the mortgage market, compare different mortgages from a range of lenders, and avoid rushing into it. Also, when you are comparing mortgages make sure you look at the small print and find out if there are any hidden charges. Comparing mortgages these days is far easier because of the Internet.
How much will I be able to borrow?
The amount that you will be able to borrow will depend on a number of factors, and this includes your income, your existing debts and regular financial commitments, your financial and employment status, and also on the lender’s own criteria. Some lenders offer higher income multiples than others, and this means that you can borrow more although it also means that your repayments will be higher.
What sort of deposit will I need?
The traditional level of deposit needed is 5% of the property value, although first time buyers have often been able to get 100% mortgages with no deposit required. However, some lenders now ask for a minimum 10% deposit as a result of tighter lending conditions stemming from the credit crunch.
Can I get a mortgage if I have bad credit?
If you have bad credit you will find it far more difficult to find an affordable mortgage, and you will find that many of the deals on mortgages are not open to you because of your credit. However, there are lenders that do offer sub-prime mortgages. Do bear in mind that the interest rates charges on these mortgages will be significantly higher than the standard, and therefore repayments will be higher. You need to ensure that you can keep up with the repayments otherwise you could end up losing your home and further damaging your credit.
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