Mortgage Policy

You may be looking for your first mortgage, remortgaging because your current mortgage deal is nearing the end or regularly checking to find the best value mortgage deal. You will of course be looking for the cheapest provider but you do need to make sure you check other items when comparing mortgages. This guide will help you do your due diligence.

If you are remortgaging the first thing you need to do is check your current policy to find out the terms, are there early repayment charges? If so what are these? Are there final fees? If these are on the large side it can remove any benefit of switching mortgage provider.

To properly assess different mortgage deals you need to ask the following questions:

What is the interest rate and how long does the rate last?

What loan-to-value (LTV) does the lender require as a minimum? The LTV refers to the maximum amount you will be able to borrow against the value of the home. Currently this ranges from 60% to 95% of the value of the property. If you can put up a higher deposit then a lender will usually offer you a better interest rate.

What charges are associated with the mortgage? Will the mortgage policy lender pay valuation and legal fees or is this paid by the customer? These can range into the thousands so do check how much these would be.

Is there an early repayment charge? What other fees would be applied to this mortgage deal?

Once you have narrowed down your choices taking out mortgage policy deals out of your reach and those with sneaky high fees compare the rest and work out the total cost over five years to work out the cheapest mortgage policy. Once you have you top choices it is worth doing a bit of research on those companies customer service. Different providers are better with their customer service than others so it is worth asking friends and you could also check out online resources such as forums and customer service orientated sites to see how they stack up.

One final item to check is how changeable the terms of the mortgage policy are. If the provider wants to raise interest rates, fees or charges, do they have to give you notice and if they do what options are available to you in response?

Tagged with: •

Like this post? Subscribe to my RSS feed and get loads more!