Mortgages: Protect your credit rating...
IF you’re looking to get on the property ladder for the first time, the range of mortgage options and rate types may be somewhat baffling.
Pete Mugleston, director of Online Mortgage Advisor, has some hints to help you to be more confident about making the decision that’s right for you.
He said: “In short it’s easier to group mortgages into two types, fixed rate or variable rate.
“Any mortgage you take is likely to have an ‘initial period’, where you are on a set fixed or variable rate for either two, three, or five years, and then you switch to a lender variable rate, at which point you can just shop around again for the next best initial rate.
“Broadly speaking, those wanting certainty of payment and security against rate rises would be advised to go fixed, those not concerned and wanting a slightly cheaper payment might consider variable, but with some outrageously cheap fixed rates at the moment it’s hard to overlook them even if you think rates are likely to remain low.”
Whatever mortgage you go for, don’t be pulled in by just a really low rate; consider the fees and total cost of borrowing over that initial period, as often it’s not the lowest rate that works out the best overall.
Pete added: “Absolute best advice would be to use a market broker who isn’t limited in the number of lenders they can go to, and they can do all this for you.
“Going to your bank might seem easier, but waiting for an appointment - and perhaps only being offered one set of products for which you could end up being declined - isn’t ideal.
“This is especially true if your situation is more unique in terms of credit history issues or income, as the good brokers out there will know which lenders are most likely to approve you before applying, saving you time, money, stress and helping protect your credit score.”
●● Online Mortgage Advisor Peter Mugleston, inset