Ruban Selvanayagam and James Durr are founders of Property Solvers, a quick house buying company and express estate agency operating across the UK. Here, they offer advice on honing your mortgage application skills…
How do you know if the mortgage you're about to secure is the cheapest available?
With 100's lenders to choose from, all with different rates and terms, trying to find the best mortgage can sometimes feel like looking for a needle in a haystack.
Below are some quick tips on finding a good deal as a first-time buyer...
Check the mortgage rates
We often suggest looking for a qualified mortgage broker to help you navigate your way through the noise. They'll be able to find you a suitable product in line with your own financial circumstances.
Remember to look beyond the headline interest rate, taking into account all the fees you may have to pay and factor them into your overall repayment costs. The two main ones are arrangement fees (see below) and mortgage valuation fees.
Also, use price comparison portals to shop around for mortgage deals, but check at least three different sites. Remember, some lenders are small and won't be listed on the most well-known sites.
Generally speaking, the more you borrow against a house, the higher the monthly pay rate will be. Therefore, put as much money towards the deposit as you can if you can afford to.
If you are accessing the Help to Buy Scheme, you should make sure that you will be able to find a new lender once the initial term ends. Otherwise, you could end up paying high standard variable rates on your mortgage down the line.
What are mortgage arrangement fees?
A mortgage arrangement fee is what you pay lenders to set up your mortgage. They will vary according to the size of the loan – but, usually, you can expect to pay around 1-1.5%.
You can choose whether you want to pay the arrangement fee upfront or add it to the mortgage repayments. It will cost you more to do the latter as you will pay interest on it.
Don't overlook the arrangement fee when you're comparing mortgages as it can have a big effect on your overall repayment costs.
Always read the small print
Once you've successfully applied for a mortgage, the provider will send you an offer. This gives you all the information about the terms and conditions.
Read it thoroughly and don't be afraid to ask any questions.
If any of the information is incorrect – say your name is misspelt or the loan value or interest rates are wrong – you can end up with delays, extra expenses or even lose the deal altogether.
However, as long as you are working with a good mortgage broker and solicitor, you shouldn't have any issues here.
For more information on selling a property quickly, see the Property Solvers website.