Finding the right mortgage deal can feel like a big task. From shopping around through countless lenders to working out the budget you have available and flicking through mortgage payment calculators, to thinking about all the other costs you’ll have to pay on top of that… it can get stressful.
However, it isn’t impossible.
Thousands of people have gotten a mortgage this year alone, and you can do it too! With planning, a little research, some advice from a mortgage adviser and a mortgage budget calculator, you can find yourself the right mortgage deal!
The first thing you need to do is to work out exactly how much money you have available which is why a mortgage payment calculator is so handy.
When making a financial investment as massive as a mortgage, you have to be honest with yourself when thinking about what you can afford. While more lenders are now taking smaller deposits for mortgages, don’t immediately jump at the deal with the lowest deposit. While this might sound like a good idea in the beginning, remember that the more money you put down, not only will a broader range of mortgage deals be available to you, but you’ll most likely be making smaller repayments in the long run.
One of the most important things you can do before applying is checking your credit score. Any lender will want to know that you’ll be able to reliably make your mortgage payments, so the higher your score, the better. Luckily, there are plenty of things you can do to improve it should it not be a high as you like.
- Use your credit card regularly but responsibly: Lenders want to see that you can pay off what you borrow, so using your card little and often and paying it back with regular payments is a great way to prove that.
- Try to pay off outstanding debts: It’s best to pay off existing debts before applying for any new credit. Banks or building societies might not see you as a good investment if you already have high levels of debt.
- Don’t miss any repayments: Paying bills on time is a simple way to show potential lenders that you’re always on top of your finances and that you’ll be able to do the same with your mortgage.
- Register on the electoral roll: This will make it easier for lenders to check your current address, plus make you seem more stable and settled.
- Try a credit-builder card: If you really need to improve your credit score, then try one of these cards. Designed for people with little or poor credit history, they usually have low credit limits and
high-interestrates. By using these kinds of cards to pay bills, it’s an excellent way to prove that your credit-worthy, provided you pay off the full amount each month.
Don’t Forget Other Expenses
When it comes to affording a mortgage, it’s crucial to remember that there’s going to be much more to pay than just the deposit.
- Stamp Duty: If you’re not a first-time buyer, Stamp Duty Land Tax (SDLT) is a tax that you must pay whenever you buy a property valued at over £125,000. How much you pay depends entirely on the value of the property you’re buying and can be anywhere from 2%-12% of the total price.
- Building’s Insurance: this is mandatory insurance that all lenders will look for when arranging a mortgage. While sometimes this is included in a leasehold property, make sure to check whether you’re already covered or not before you apply for a mortgage.
- Moving Costs: It seems like an obvious point, but plenty of people forget that the act of moving to a new house itself can cost quite a bit. Make sure to consider what you’ll have to pay for and factor it into your budget as well i.e. hiring a van, paying movers, having the house cleaned etc.
A lot of people wonder when the right time to get mortgage advice is. The answer? Whenever you feel like it!
While estate agents and banks will offer you advice on mortgage products, it’s best to avoid them. Most of the time they will only give you information on the deals they have available, so you’ll be missing out on potentially thousands of other deals.
This is where mortgage brokers come in.
Acting as a middle man between you and the lender, a mortgage advisor can give you information on a whole range of mortgage deals as well as how likely you are to be accepted. While most will charge a fee for a full service, you’re paying for the expertise of someone helping you with one of the most significant financial decisions of your life.
Mortgage Payment Calculators
One of the best ways to see what you can afford is with a mortgage payment calculator.
If you don’t want to see an actual human, there are plenty of online mortgage brokers that can help you narrow your choices. Once you’ve done that and you’d like to know how much you could be paying month to month, that’s where the mortgage payment calculator comes in.
These online tools usually take a few details like the mortgage you want to apply for, the value of your property, your annual income etc. And use the information to work out an estimate of how much you would be paying for your mortgage month to month. Some can even compare two or three options side by side so you can see which deal could work better for you in the long run.
While the calculator results won’t give definitive numbers at that stage, some mortgage payment calculators are designed to be used after you’ve applied for your mortgage and so can provide more accurate details of your monthly payments.
Ultimately, a mortgage is a substantial monetary commitment, and with hundreds of different mortgage rates out there, you’re going to want to do all you can make sure you find the right deal.
It’s simple. Don’t jump at the first deal you see, stay on top of your finances and try a mortgage broker and mortgage payment calculator to see which deal is best for you!