Buying a house is possibly the largest purchase you will ever make, so it is important to know that you are making the right decision. The Bank of England base rate is at its lowest for many years, making some of the current mortgage deals the best ever available to home buyers. However, there is more to obtaining a mortgage than the advertised interest rates.
The main concern for many buyers is whether they could afford the mortgage payments if interest rates started to increase. Some types of mortgage, like a discount or tracker mortgage, can go up at any time, meaning that your monthly repayment will also increase, possibly substantially.
Don’t sign up to the cheapest mortgage deal you find, as there may be hidden charges which are costly. Some lenders may charge an expensive arrangement fee, and in some cases, this will add to the overall cost of your mortgage. If you are unable to calculate the overall cost, speak to a CeMAP qualified mortgage adviser who will be able to help you.
Before tying yourself into any mortgage deal, you should consider carefully whether you will want to make overpayments, especially if it will be on a regular basis, as some lenders either don’t permit extra payments or set restrictions.
Consider the type of mortgage deal you want too, as a lengthy fixed rate deal may seem a good idea, but if you decide to leave before the end of the agreed term, you will have Early Repayment Charges. Speak to an adviser if you have any questions before applying for a mortgage.