The mortgage world has greatly evolved recently. The number of mortgage products on the market is more restricted than before, 100% Loan to Value products have almost disappeared, and lenders typically are becoming much more prudent. Gone are the days where they offer loans equal to five times your yearly income, and for customers with poor credits rating, applying for a mortgage has become hugely difficult. Despite the recession, it is still possible to find some great mortgage deals on the market. Here are 7 top tips to help you get the best mortgage rates:
1. Make sure you’ve got a large deposit: while 95% Loan to Value deals might still be available from some lenders, the top mortgage rates are usually offered on less than 75% Loan to Value products. Make sure you save as much as you can for your initial deposit.
2. Important deposits go a long way for remortgages as well: because of the fall in house prices, you might well find that the LTV for your home is higher than when you started your original mortgage. A possibility can be to utilise the funds in your saving accounts towards a better deposit in order to obtain a more interesting remortgage deal.
3. Keep track of your credit record: the mortgage applicants worst affected by the recession are people with bad credit, aka “sub prime”. If you have poor credit, the mortgage rates available to you will be substantially greater as the mortgage lenders try to guard themselves against the risk of lending cash to a customer with a poor credit record. Ensure you know your credit history and take corrective steps to bring back things on the right track.
4. Speak to a independent mortgage advisor: If you have got an unusual case, e.g. if you are freelance, it’s really important that you talk to a mortgage advisor. A good mortgage adviser will work with you to understand your personal circumstances and choose the top products available for your situation.
5. Go for fixed rate deals if you would like to have security: fixed rate deals guarantee that your mortgage repayments will stay fixed and will not go up or down with changes in the Bank of England base rate. This security does not come free though, and fixed rate deals are usually more expensive overall than variable rate mortgage deals.
6. Choose a tracker mortgage product for the top rates: tracker mortgages rates fluctuate with the Bank of England interest rate. The mortgage interest rates offered for tracker deals are generally lower compared to fixed rate products. There is always the risk however that the BoE rate could go up and cause higher payments if you choose a tracker mortgage deal.
7. Check the arrangement fees: the top mortgage rates usually have high arrangement fees. It is important that you calculate the overall cost of the mortgage over the entire period, taking the arrangement fees into account, to understand what is the best mortgage product for your circumstances.