In order to buy a home, you’ll probably need to borrow money from a lender. This process can often seem complex and daunting, but, in fact, there are only some basic things you need to know.
It‘s important to get your head around a few common aspects of a mortgage. It’s not always a case of hunting for the lowest interest rates - you need to find a mortgage that fits your circumstances.
Here are some factors you might want to consider when looking for a mortgage:
The rate of interest you will have to pay back when repaying your mortgage. Each mortgage comes with a particular interest rate. Dig down into the details of each one to make sure you’re getting the right package for you.
The interest rate for the whole year, rather than on a monthly basis. The APR may take some mortgage fees into account, combining them with the interest rate, and express it as a percentage.
The interest on your mortgage may be charged at different times of the year. Daily interest tends to work out cheaper. However, options to pay monthly and annually usually exist.
The down payment you must provide to show you can pay off the mortgage. Oftentimes, the higher the deposit, the less interest you will have to pay when paying off your mortgage.
Mortgages with fixed rates have rates of interest that stay the same, whereas mortgages with variable rates have interest rates that can change.
Are you happy with having an interest rate that is fixed for a long period or would you like to have more flexibility? Research the likely outcomes of your choice, since it will affect how much you will be paying in the future.
Lenders and financial advisors are closely regulated. When they recommend a mortgage, they’re obliged to offer advice. When recommending a mortgage, they will assess your income and day-to-day spending to ensure you can pay off the mortgage. They will then make a recommendation.
Even though mortgage advisors and lenders must offer advice, you can choose to reject their advice and find your own mortgage deals based on your research and decision process.
Choosing to apply for a mortgage without advice is called an ‘execution-only’ application. Getting advice when moving forward with a mortgage will enable you to have more rights if the mortgage turns out to be unsuitable for your needs.
If it came to a stage where you needed to make a complaint regarding your mortgage, then you could make a complaint for financial miss-selling if the advice you were provided with turned out to be unsuitable for your circumstances.
If you don’t take advice, you take full responsibility for your mortgage decision. You could therefore potentially end up with a costly mistake in the long run.
If you don’t understand restrictions properly when applying for a mortgage, you can potentially be rejected by your chosen lender.
But don’t worry. MCR Homes will do all the work to make sure you’re in touch with the best mortgage brokers and financial advisors. Find out how this works.
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