How to decide on the right mortgage for you

January 15, 2018 | Author: | Posted in FINANCE

Buying a house is probably the biggest investment you are ever likely to make, it is a huge moment in your life and you are unlikely to invest quite as much thought and effort into something again.

As a general rule, mortgage companies allow you to borrow three times your salary, or two and a half times your joint salaries if you’re buying with someone else. In the current market there are a number of different types of mortgage available; some of which will let you borrow more than this. Thus after saving enough for an initial deposit you can set about seeing what is out there and what best suits you.

And so it begins: a time consuming but ultimately rewarding search; assuming, of course that you listen to good advice and examine everything in the greatest of detail. You will be required to step out of your comfort zone a little and begin to think about the immediate and long-term future.

Taking out a mortgage is a daunting step for many, involving numerous meetings, paperwork and a very thorough examination of your financial affairs. It is advisable to prepare for any meetings with your mortgage broker or financial advisor by creating a list of your current finances, such as salary, expenses, debtors and any information you have about your credit history. Preparation and honesty will see the process run a lot smoother.

The typical mortgage is repaid over 25 years, so it is best to be in your first property for five years in order to reap the benefits. This is due to the fact that if you have a repayment mortgage, most of your repayments during the first years are spent only paying interest. Also, when you factor in the cost of moving (solicitors, stamp duty etc.) you will find that it’ is not very cost effective to move regularly.

To compare mortgages and assess your options is the best course of action, as the calculations involved will help to quickly dismiss the options that are not suitable and leave you with a choice of more manageable options.

There are many mortgages out there but those available to you are determined more by your personal finances than by choice. Among those out there are, fixed and variable rate mortgages, cash back, offset and flexible mortgages to name a few.

While it is understandable when buying a property to be more concerned with its size than with studying the small print on the mortgage agreement, failure to do so can prove very costly in the long run. It is strongly recommended to review your mortgage agreement in detail, and the smaller the print, the closer you pay attention is a good rule of thumb.

Many may baulk at the work involved in securing the correct mortgage, but like anything else, once you commit to making the time to sit down and go through it all, you will find that things will fall into place and your efforts will be rewarded.

Daniel Collins writes on a number of topics on behalf of a digital marketing agency and a variety of clients. As such, this article is to be considered a professional piece with business interests in mind.

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