Basingstoke ObserverSOMETHING I am being asked about a lot at the moment is the mortgage market and how easy it is to get a mortgage at the moment.
Firstly, as long as you have a stable credit history, getting a mortgage is as obtainable now as I have ever seen in my 25 years in the industry but there are some things to consider.
Make sure you can pay it back! Lenders are open to lending money, but the most important thing is that you can pay it back. Yes a lender might be able to lend you more than you expected, but you need to factor in if interest rates go up and your ability to afford the mortgage then. For example, a £200,000 mortgage over 25 years at 1.8% is £828.37, if interest rates went up 2% your payment would go up to £1033.24. Could you afford the £204.87 difference? Always stress test your monthly repayment by asking: what happens if?
Make sure your Credit History is sound. Most lenders will make a decision solely on your credit score, so check yours and make sure all is as it should be. The likes of Experian, Equifax and clearscore can give you your credit score within a few minutes. Depending on your deposit amount, you will still be able to get a mortgage if your credit score is not as good as it could be, but you will pay higher interest rates so make sure you know what your credit score is to keep as much money in your pocket as possible.
Watch out for the fees. There could be an array of fees when taking a mortgage. Valuation fees, possibly arrangement and booking fees. Some can be added to the mortgage and some can’t so make sure you look at what fees there are and how they are paid. If you are looking at remortgaging to another lender, they may offer to pay your valuation and legal fees to do so.
Don’t forget your protection. It is one thing buying a property, it is another thing staying in it should something drastic happen. When looking at your budgets, don’t forget to include home and life insurance. These are crucial when buying a home and you legally need to insure the property you are buying.
Shop Around! If you are coming to the end of your mortgage deal with your existing lender or looking to buy a property, speak to a mortgage broker. They will be able to look at all of the mortgage lenders on the market in a matter of minutes saving you time and money. You will also be able to take advice and get the mortgage best for you, based on your circumstances.
By Kevin White
Kevin White is a Director and Financial Adviser at local company Fortem Financial Management.
