Picking the mortgage that you are going to run with is a big decision whether you are moving home or a first-time buyer, so doing your homework is key. Knowing what is right for you is something that can only be decided by people who know your circumstances and background.
Whether you’re looking at the rates or the terms of a mortgage along with the additional extras like cash back, there is plenty to look at and consider. Whatever you are looking for in life, knowing what suits you perfectly is difficult. Comparing mortgage rates can be a great way of finding the cheapest deals, but it’s the overall package that you need to look at.
Considering that, it can be hard to pinpoint exactly what you need, so we will run through a few questions to help you on your way to knowing more about mortgages and if they will suit you.
Are you throwing savings in?
- Yes – An offset mortgage could be a great option because you can use any savings to reduce mortgage payments by deducting this money off what you owe.
- No – This means that you can’t look into offset features and may even lead to you having a 100% mortgage.
Do you want to avoid interest rate changes?
- Yes – Use a fixed-rate mortgage so that you have a period fixed for specific amounts. This gives you flexibility and peace of mind for safe guarding the home but can lead to application fees and leaves you unable to cash in on interest rates falling.
- No – If you have an adjustable mortgage, you could be in line for good savings if the economy and market is moving well. Alternatively, if it falls again then you will be left with higher rates than you first started with. For this, always consider capping.
Could your circumstances change?
- Yes – Particularly if you are self-employed, the money may be better one month than another. What this means is that the ups and downs of life can change what payments you make each month so you can under or overpay. If it goes well you can pay your mortgage off early.
- No – If not, then it is likely that you are better off sticking with a fixed-rate for stability purposes.
Do you have a good credit rating?
- Yes – This means that you should be able to almost pick and choose what you want without problems. Getting a mainstream mortgage is always what you want to achieve.
- No – While some people think that a bad rating makes getting a mortgage impossible, this isn’t fully true. While it will be more difficult, and lead to you paying bigger rates, brokers can find bad credit mortgages.
Are you buying to let?
- Yes – If you are planning on renting the property, then you will be better off looking for these types of mortgages because your rent can determine the borrowing amount rather than the income you show.
- No – Continue to look for a regular mortgage.
There are some of the big questions answered when it comes to taking a deeper look into what mortgage suits you the best. If there are extra things to consider like your parents guaranteeing payments then you will need a guarantor mortgage. Additionally, always look to use a specialist to help you along the way, while also comparing deals online.