If you are able to secure and identify good mortgage rates when taking out your loan then you can potentially save thousands of pounds over the life of your mortgage term. A small monthly saving of just £10 over 25years will add up to huge savings in the long term.
For the average person on the street being able to identify good mortgage rates and then choose a product from the hundreds that are on offer is confusing – different lenders try to gain custom by promoting low figures and claiming to offer the best deals but it seems that the more information we are given the more confused we become.
You will of course be able to find the best deal if you have a large deposit and an excellent credit rating but even if this is the case you will still need to consider which is the best product for you, if you have additional savings then an offset mortgage may work out to be the most efficient way to purchase a home. If you follow current affairs then you may have an opinion about Bank of England Base rates and decide that a fixed rate or tracker mortgage is a sensible decision.
If you have an adverse credit history and a very small deposit then good mortgage rates will reflect the extra risk that lenders have assessed you may pose. But you could still have a wide choice of products to choose from if you discuss your personal circumstances with a professional advisor. Customers in this situation can sometimes arrange a mortgage product that has an initial high rate of interest but then swaps to the lenders standard rate at the end of the agreed period. This allows borrowers to build up and improve their credit score over 2 or 3 years and then offers the possibility of being able to consider moving the mortgage loan to a mainstream lender.
Of course most home buyers will fall somewhere in the middle of the scenarios outlined above and it is this group that will probably have the most confusing choices to make. Fixed rate, discount rate, tracker or offset mortgages will all have their own appeal, but it is the implications of arrangement fees, early repayment charges and other factors that will affect the cost of the product in the longer term.
Good mortgage rates will always depend upon individual circumstances and personal views about the economy. First time buyers are often anxious about set up costs and making sure they can afford to pay their mortgage in the first few years. This group will often choose a fixed rate product with no initial arrangement fees or free legal services even if the interest rate is slightly higher – budgeting is less complicated and financial commitments can be managed easily.
Existing homeowners often have an advantage as they may be in the position where the equity available in their current home will serve as a big deposit on a new home loan or re-mortgage. For these customers the decision will probably be more focussed upon interest rates and how long they will be tied into a new deal, short term incentives will have little attraction and will probably be unsuitable.
When faced with such a wide array of choice keep in mind that your home is probably the biggest financial investment you will make and it is therefore worthwhile to take some time to make sure you are getting the best deal. Seeking advice from a professional is simple to arrange and will help you to understand the implications of choosing a new mortgage. Understanding interest rates and mortgage charges should be high on your list of priorities and there is no better way to do this than to make use of a personal advisor. By discussing your own opinion and perception of the economy you can make decisions that are based upon well thought out reasoning and facts and choose the mortgage product that best suits your needs.
This kind of advice is often free as the lender will usually pay a commission to the broker, the advice that you receive will be impartial as the broker will not be employed by any one financial institution and by doing a few calculations it is possible to save hundreds of pounds.
So the next time you see a very low headline rate advertised in the newspaper or flashing on your computer screen, make sure that you take care to read the small print to find out if that rate will actually apply to your personal situation and seek some advice to find good mortgage rates that suit your circumstances.