How To Get The Best Mortgage Deal For Your Money

There are plenty of mortgage options out there when it comes to buying a home. However, choosing the right one is important because if you don’t, then you end up with repayments that might be too high for you to afford or waste the money you have coming in as an income.

The higher the interest rates, the more you’re paying out, and right now, interest rates are still high. That’s why you should be understanding of how the mortgage system works and knowing when to get a mortgage.

There are also plenty of other factors that will influence your ability to get a mortgage or access to the best deals. With that being said, here are some helpful tips to get the best mortgage deal for your money this year.

Have as much of a deposit as possible

Ideally, you want to have as much of a deposit as possible. The reason for this is that it significantly lowers your monthly repayments and interest, depending of course on how much you can set aside. For some people, a deposit might consist of just savings if this is your first time on the market.

For existing homeowners, the money you have might be tied up in an existing property which you’ll need to sell before you buy your next home. Some may also have a mix of both, money in savings and money tied up in the property they own.

The more you can have available to you, the better the deals will likely be. You’re going to widen the net when it comes to available lenders, as well as the term lengths for the mortgage and the best rates that come with those lengths.

Work with a mortgage broker

A mortgage broker has access to the entirety of the lender’s real estate. When it comes to borrowing money, there will most likely always be a lender willing to lend you the dosh, but you will find that the fewer options you have, the more expensive it becomes.

Working with a mortgage broker is important as it gets you access to a variety of lenders, helping bolster your mortgage application and increase the likelihood of it’s success.

When working with a mortgage broker, you should consider what reputation they have currently. Some will be much more effective than others, especially if they’ve been on the job longer than most. Over time, these mortgage brokers will likely build up relationships with lenders, meaning the broker’s clients will benefit.

Look at your options when it comes to a mortgage broker and pick one that’s going to provide the best service and deal for you.

Pick the right time to get a mortgage

Timing is everything when it comes to getting a mortgage. If you’re in the fortunate position where you don’t have a mortgage yet, you might want to sit tight before getting a mortgage. Currently, the interest rates are sky-high and are no longer the 1-2% luxury that we once had and perhaps took for granted.

Now, the average is around 5.5% depending on the lenders and your own circumstances when it comes to money available in salary and deposit, credit score, etc.

With that in mind, it’s worth knowing when the right time to get a mortgage is. If you’re coming up to renewal, you might not have much choice but if you’ve got a lot of time, you might want to lock in a deal up to six months before your current mortgage deal ends.

If this is your first mortgage, it’s better to hang fire until the mortgage rates are stable and come down closer to 2-3%.

Improve your credit score

Your credit score is influential to the options you’ll get when taking out a mortgage. Think of your credit score as your reputation with lenders. If it’s bad, then few lenders will want to lend you money because chances are, you’ve got a bad habit of not paying back what you borrow.

However, if you’re borrowing regularly and paying it back on time, that’s going to do wonders for your credit score.

There are other ways in which you can build up your credit score and if it’s over the halfway mark, you’ll have more options to choose from and more of a chance at getting your mortgage application approved.

Other ways to help build up your credit score include:

• Registering to vote
• Borrowing more money
• Paying your debt back quickly
• Ask for higher credit limits

Make a joint application

A joint application is going to be your best bet when it comes to getting a great mortgage offer. While a joint application might not always be possible, there are some considerations to make in getting an application in with a family member or friend over just a partner – that you might not have.

With a single application, your opportunity to borrow more might be limited. When you’re a joint applicant, you’ve got the ability to borrow more because you have two incomes as opposed to one.

Therefore, some people choose to buy a property with a family member or friend, in order to enable one another to get onto the property ladder in the first place.

Compare lengths of mortgage agreements

The lengths of mortgage agreements are also something worth considering. Some rates are going to be better if acquired over a five-year term, while others might be best on a two-year.

You should also consider what the chances are of the mortgage interest rates coming down within the time you take out the new mortgage. For example, you might only want to keep a two-year mortgage if you know the rates will drop significantly. Locking yourself in five years might be shooting yourself in the foot.

Fixed or variable?

And finally, another option to consider when comparing lengths of mortgage agreements is whether the repayments are fixed or variable. Variable will mean your interest rates fluctuate, aligning with the banks or fixed, meaning the same payment comes out every month.

Getting a mortgage deal is important, especially when it comes to maximising your money, so use these tips to get the best deal possible for your money this year.