08 Oct 2019
How to get yourself the best mortgage deal
For many, finding the best mortgage options can be a particularly daunting task. Your mortgage is most likely going to be the biggest financial commitment you’ll ever make, yet it can be difficult to know exactly where to begin.
There are a lot of things to consider before settling on a deal, but that doesn’t mean each element needs to be as strenuous as the next!
Let us take you through some of our quickest and easiest ways of securing the best mortgage deal for you. You might be surprised at just how easy they are…
Make the largest reasonable deposit that you can.
There can be a fine line between the doable and overstretching yourself when it comes to your deposit. The more that you can pay upfront will mean the less you’ll have to pay back in the long run in interest rates.
The more deposit you can put down, the better the mortgage rate offered is likely to be. Lenders tend to band mortgage loan to values in the following way. Best rates at 40% plus deposit, next band is 25% deposit, then 15% deposit, 10% deposit & finally 5% deposit. Not only do the rates offered get better with the more deposit you have but, also, it’s likely that you won’t need to achieve such a good credit score, the more deposit you have. Basically, the greater your deposit the safer a proposition you are to the mortgage lender.
That said, we know that paying a higher upfront cost isn’t always possible for those looking to get onto the property ladder. If you find that this is the case, it’s important to only make a payment that you know is reasonable and manageable.
If deposit is an issue we recommend looking into a government ‘help to buy’ scheme. This government support can provide you with up to 20% towards your deposit as long as you can supply a minimum of 5% deposit. In addition, this loan is interest-free for the first five years, which again means a lower amount of interest to be paid back in the future.
Are you in long-term employment?
Lenders will want to see your financial background. Part of this process will involve looking at your last few payslips. Often this will be your last three months but can be up to six.
They will also look at how long you’ve been in that role for. If you can demonstrate long-term job security, you’re likely to appear more financially reliable than someone who regularly floats between jobs.
We would also suggest getting any bad spending habits in order in the build-up to applying for your mortgage! If you’re making large and unneeded payments on nights out, trips away and luxury items, it may be worth reeling in your spending. This will help you with your future finance management, as well as demonstrate a sensible level of expenditure to mortgage providers.
Paying off outstanding debt
Easier said than done, right? Now we don’t necessarily mean paying off all outstanding debt, because that is fairly improbable and a little too idealistic. What we would suggest, though, would be to pay off as much as you reasonably can.
The better your credit score going into the application process, the better your chances of securing the best deal.
We would also suggest getting into good habits with any credit cards you may have. Using your card little and often in manageable payments will do wonders for your credit score. Paying it back monthly will show to lenders that you are reliable when it comes to paying off outstanding credit. But please ensure you exceed the minimum required payment as only making minimum payments will go against you.
It’s also important to examine your credit rating for any mistakes before starting with the mortgage application process. If, for example, one of your old accounts appears to be open when in actual fact it’s closed, this will be influencing your overall credit score.
Whilst checking your credit report for accuracy, look at any late or missed payments you may have as these will definitely count against you, especially if you have a small deposit or they are with the last 12 months. Again, to a lender, it’s a sign that you can’t budget at a time when you need to look as reliable & dependable as possible.
Fine-tuning your rating will only make you more attractive to lenders, increasing your chances of having an application accepted.
These are something that lenders absolutely hate & something that should be avoided for at least 12 months prior to applying for a mortgage. To a lender a Pay Day Loan is proof that you cannot budget so, why on earth would they want to lend you a large sum of money.
This may seem unusual but being on the electoral register can increase your chances of being offered a good mortgage deal. Mortgage providers will often reference this information when finding out who you are and adds a further element of transparency to your application.
Being on the electoral register will also provide lenders with information such as previous addresses, which will again contribute to your chances of being accepted.
So, there you have it. Each one of these tips should be achievable to some degree and are all proven to have a positive influence over reducing ongoing mortgage fees and interest rates.
If you’re ready to take the next steps towards finding your perfect mortgage, then please click here. Equally, if you’d like to find out a little more about us here at Mortgages.Online, then please click here.