There are so many lenders offering mortgages these days that it can be confusing knowing which one to choose. You may see adverts from different lenders all claiming to have the best deal and this can make things even more confusing as you can wonder how more than one lender can have the best deal for you. This is the solution though, you need to look at what you want and find the lender that matches that the best, the reason there are so many deals is because borrowers all have different requirements. Therefore you should think about the sorts of things that you think will be important to you. Below are a few ideas.
Most people will look first at the interest rate when they are comparing mortgages. This is important as it will determine how much your repayments will be. It is important to note the difference between fixed and variable interest rates. The variable interest rate will change frequently, usually when the base rate changes but sometimes at other times as well, depending on the specific terms of the mortgage. A fixed rate will not change for a certain period of time, this is usually a number of years. This can be advantageous as it will protect you against the rate going up if the base rate changes, but it will also not go down if the base rate goes down which means that it can sometimes be much dearer. You get tied in for a certain time period as well and cannot switch to a different lender without paying a penalty.
Although interest rates can be a good way to compare mortgages at one point in time, the rates change between lenders and within a few months you may find that there is a different lender that is more competitive. This is one reason why it is important not to just rely on interest rates as a guide to which lender to choose.
There are other costs of a mortgage as well as interest rates. You will usually be charged an administration fee when you set up the mortgage and these can vary. You may be charged a fee if you want to make any overpayments, have a payment holiday or something like that as well. If you miss an interest payment or repayment then there will be a charge as well. It is worth looking into the various charges so that you are aware of them and think about whether there are any that you are likely to have to pay which could be significant when you are comparing the lenders.
The amount that you repay each month is determined by a number of factors. The interest rate will determine the amount of interest, but also any costs that are added in as well as the term. The term refers to how long the mortgage is for. If the mortgage is for a longer time, then there will be more repayments than if it is for a shorter time, but the payments will be larger. You need to think about what you can afford with regards to repayments and make sure that you sign up to a mortgage deal that will be affordable for you. Try to consider whether you will be able to afford it in the future as well as right now.
Some people prefer to use a lender which has a branch near to where they live. This is because they like the idea that they will be able to talk to staff if they have any problems or concerns. They may also just like the security of knowing that the lender is big enough to have branches.
For some people having good phone or online support is important. If this is the case with you then it is wise to try out that support by contacting them and asking some questions. You will be able to judge them based on how well they answer your queries and how polite and friendly they seem to be towards you.
when you are looking for a first time mortgage then it can be really hard. There are so many options, different types of mortgages and different lenders that it can be wise to ask for help. You could speak to friends and family that have got mortgages and see what criteria they looked at when they were choosing theirs. You can also consider using the services of a financial advisor. These will cost money and when you are looking for a mortgage, you will probably be cutting costs wherever you can and so may think that this is too expensive. However, a good financial advisor could end up saving you a significant amount of money and so it is well worth considering using one.