For first-time buyers, the notion of owning your own property can be a scary thought, especially considering the expense of the purchase and how long you’ll be paying it off. For people looking to get a new mortgage, it can also be a stress-inducing trying to find yourself a new deal on top of selling your current property and making sure all your legal affairs are in order.
While no one can say that finding the right mortgage is an easy task, there are more than a few things you can do to make the whole process smoother and better-value in the long run. As possibly the most significant financial commitment of your life, finding the right mortgage lender can save you thousands, so putting in the right amount of time and effort is crucial.
With some research, a few budget calculations and the help of an online mortgage broker, you can find yourself the perfect mortgage deal without stressing too much.
Assess Your Budget
The first thing you need to do is to work out the money you’ll need.
If you’ve already been house hunting, then you should already have an idea of the amount you’ll need to borrow. What’s important to consider is how much money you have available for a deposit. While more lenders are now taking smaller deposits, it’s a good idea to save as much as you can. This will widen the choice of mortgages available to you as well as meaning your monthly repayments will be smaller.
Make sure you include every cost in your budget before you start shopping around for mortgages. While the deposit will be your main expense, there are still others to add on like stamp duty, moving costs, and buildings insurance. Don’t get yourself into financial trouble before you’ve even paid the first installment of your mortgage!
This is also an excellent time to check your credit score as even if you have a reasonable budget, many lenders will not accept you if you have poor credit. You need a good score, so you look reliable enough to keep up with your monthly payments.
Avoid Estate Agents, Building Societies and Banks
Estate agents may offer to make you an appointment with their own mortgage advisor, but don’t feel pressured to agree. Most of these kinds of advisors will not have a huge number of mortgage products for you to consider and so will limit your chances of you finding the right deal.
Banks are also good to avoid when you first start looking. While you might like the familiarity of your current mortgage provider or bank, they aren’t going to tell you about other deals on the market, especially better value mortgages.
What you want is a service that will offer to search the whole mortgage market and find you the cheapest offer. With literally thousands of mortgage deals on the market (and that number only rising), going directly to a lender is going to cut you off form a number of these options.
Try an Online Mortgage Broker
One of the easiest ways to see what kind of deals are available to you is with an online mortgage broker.
Unlike traditional brokers, online mortgage brokers function more like a comparison site and are there to give you a basic idea of the type of deals you could qualify for. Unlike speaking to an actual person, the process is almost always completely automated. There’s no shop front, no meeting and no face-to-face discussion. Perfect for those who work a busy schedule, want to check deals outside of regular business hours, or who just don’t like talking to people very much.
When using an online mortgage broker, you will need to enter a few basic details like your annual income, age, budget and whether you’re a first-time buyer so it can search through the available deals that you could be accepted for. These services can work as a great starting point as many will not charge for you to search. Many do also offer services to take the application further in exchange for a fee, but that is usually entirely optional.
While these are great tools, the downside is that they often can’t give you very specific details about the deals and, if you’re in a more complicated financial situation, they may not be able to provide you with the most accurate results. Plus, since most don’t ask for specific credit information, they will not be able to tell you if you’ll be accepted for the deals that they show.
Many use online mortgage brokers in conjunction with other services to find themselves the perfect deal, so even if you can’t get all the details you want from these websites, they’re a great place to start.
Physical Mortgage Brokers
If you’ve gotten some basic information from an online mortgage broker, then going to see a human mortgage broker is an excellent next step.
While plenty of people like the convenience of a website, a physical mortgage broker will have most of the same advantages. Many will be able to work around a hectic schedule, as more businesses are realising the world is becoming increasingly more 24-hour. They will also have the same scope as an online broker, with the added benefit of being able to discuss more complicated situations and how likely you are to be accepted.
Moving onto a physical mortgage broker, you can get a more personalised service. With someone directly in front of you, there can be a more open dialogue, and they’ll be able to answer any questions you might have. They will also often offer to investigate other deals for you, like life insurance and stamp duty so you can be fully covered.
While they will charge broker fees for a complete service, it’s a small investment to get the expert advice you need for such a substantial financial commitment.
With how long you’ll be paying off your mortgage, taking the time to find the best deal is one of the smartest financial decisions you can make. Owning your own home is something almost all people want to do, and while you may have to put in some legwork while shopping around, trust us, it’s worth it in the end.