Tips on Picking a Good Mortgage

Whether you are getting a mortgage for the first time or remortgaging, it is really important to pick the right mortgage. This is because you will end up paying out large amounts of money to your mortgage provider and you want to make sure that it is justified. There are quite a few things that you will need to consider but a few of them are explained in detail below:

  • Carefully check out the cost – many of us will just compare interest rates and use that to decide which lender is the cheapest. However, this is not the best way to compare lenders. This is because the interest rate will not always be the only cost that you pay. Although interest does tend to be the biggest charge with a mortgage there may be other fees as well. Things like admin or set-up fees tend to be charged for new customers. If you want to overpay or repay early there is likely to be a fee. If you miss repayments or want a payment holiday there will be fees for this as well. Some fees you have to pay and some you may not but it is worth knowing what they all are so that you can compare them to other lenders.
  • Make sure you can manage the repayments– one of the most important things that you should be considering is the repayments. You do not want to miss any repayments if you can help it and therefore you need to know how much they will be and calculate whether you will be able to afford them. The rates will vary a lot and they will be determined by the interest rate of the lender and any fees they incorporate in but also by how much you borrow and how long for. It is a good idea to find out exactly how much you will be expected to pay so that you can calculate whether you can afford this much or not. It is a good idea to think about whether you could afford this much in your current financial situation and whether you think you will continue to be able to do so for the whole term of the loan.
  • See if you are tied in – it is a good idea to find out whether you are tied in to the mortgage or lender. Sometimes you may find that there is a clause in your mortgage agreement that states that you need to stay with the lender. This might be more likely with fixed rate mortgages where they will try to tie you in for the fixed rate period and sometimes beyond as well. You may be able to get out of it but there could be a considerable amount of money to pay in order to achieve this. You will be wise to find out about this before you take out the mortgage as otherwise, if you do get tied in, you could find that you will see better rates and want to move to a different lender but cannot do it or cannot afford to do it.
  • Check their other features – it is good to think about any other features that might be important to you in a lender. For example, you might like one you have used before, one that has been recommended, one that will be flexible, one that has good reviews, one that has online accounts, one that has a high street branch or whatever. Think about whether there are any things like this that are important to you and then you should be able to decide whether you think that the lender will suit you and your requirements. It is possible that you will be with them for a long time and so you need to make sure that you are completely happy with them.

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