If you are planning to buy your first home on a mortgage, the mortgage lender you work with will act as the primary source of financial help you receive. It is important to understand that a mortgage deal is only as good as the lender offering it. It is safe to say that finding the right mortgage lender is as good as getting half your job done!
The lender you work with will ultimately determine the mortgage you receive, the deposit you pay, the criteria you meet, the documents you provide, and the application process you go through. As a first-time buyer, it may get difficult for you to choose the most suitable mortgage lender. Most first-time buyers are not informed enough to make the right decisions.
This is why it is important to work with a skilled mortgage broker.
As you navigate through the process of buying your first home or re-mortgaging, work with an experienced mortgage broker in the town you want to purchase property or re-mortgage your property. For example, if you wish to buy near Croydon then you look for Mortgage Broker Croydon has to offer. Mortgage brokers have access to an elaborate network of mortgage lenders, all offering a range of different deals. As you give them your requirements, they will know where to look and whom to suggest. With a mortgage broker, it becomes easier to find a mortgage lender that best suits your needs and gives you the best mortgage deal.
Apart from working with the best mortgage broker, here are a few important factors to consider before choosing your mortgage lender:
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Type of mortgage required.
Not all mortgage lenders offer all types of mortgages. While certain lenders specialise in first-time buyer mortgages, others help with home mover mortgages or buy-to-let deals. Before you approach a lender, make sure you know the type of mortgage you are looking for. As a first-time buyer, look for mortgage lenders known for offering the best first-time buyer deals. These lenders understand the dilemma and confusion of someone entering the property ladder for the first time.
Get in touch with your mortgage broker and they will help you find the right lender.
Your credit scores.
If you are suffering from bad credit or other issues related to your credit score, you will need to be careful while choosing the mortgage lender. Under such circumstances, it is not always the best idea to approach high-street lenders who give out conventional mortgage deals. However, having credit issues does not mean you will never get to be on the property ladder or able to re-mortgage. There are specialised mortgage lenders in the market who help borrowers with such issues. All you need to do is look for them with the help of your mortgage broker.
Interest rates and terms
Different mortgage lenders will give you different interest rates and loan terms for the same property. Make sure you consider these aspects before finalising a deal and making up your mind about a lender. Homebuyers often end up making the mistake of hooking up with the first mortgage lender giving them a good deal. It is always better to shop around and examine the rates and terms offered by multiple lenders before you choose the best alternative.
Your Local mortgage broker will guide you here by letting you explore multiple options. They shoulder the responsibility to scan the entire market and bring multiple deals for their clients to compare and analyse. Never hurry in matters related to interest rates and loan terms as you will be dealing with them for years after getting your mortgage.
Apart from the market value of the property you want to purchase, you will be incurring many other expenses in the process of buying. From valuation and application fees to lenders fees and other relevant expenses, the final price you pay differs from one lender to another. Though with remortgage most valuation is free, but charges still involve.
Consider each of these expenses while choosing your mortgage lender to get a good deal. Simply getting a lucrative interest rate is not enough. If you are paying a hefty fee to a mortgage lender, the benefits offered by a lower interest rate may just get nullified. Be mindful of all fees charged by the mortgage lender you approach while making sure there are no hidden charges. You can always consult your remortgage broker. They will ensure that the expenses you incur do not outweigh the benefits you receive while associating with a mortgage lender.
Mortgage deposit or Equity
Just like interest rates and loan terms, different mortgage lenders will ask for different rates of deposit or equity for remortgage. While a bigger deposit brings your LTV (loan-to-value) down and helps you manage your monthly repayments better, it is also important to know that first-time buyers often struggle with making bigger down payments. Examine the deposit or equity is required from lender before choosing them for purchase or remortgage. Many lenders also offer down payment assistance to first-time buyers to prevent them from eating into their savings. Your mortgage broker will help you find such lenders if you have enough patience to go through all the options available to you.
Provisions for overpayment
Many mortgage borrowers find it helpful to overpay their mortgages for a few months to reduce the overall debt burden on their shoulders. If you are earning a little extra and are in a better financial position for some time, you may want to pay a little more than your monthly repayments to manage your debt effectively. However, not all mortgage lenders have a provision for the same. Many lenders charge mortgage overpayment fees beyond a specific limit.
Before you choose your first mortgage lender, see if they have provisions for overpayment. Ask the right questions and confirm whether they allow overpayment of your mortgage or not. To further assist with your first-time purchase, work with brokers who offers Fee Free Mortgage Advice like MariannaFS.
This will give you a clearer idea about managing your finances and prevent any misunderstanding in the future.