Top Tips for Choosing the Best Mortgage

Image courtesy of Salvatore Vuono at FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono at FreeDigitalPhotos.net

Choosing any financial product can be difficult but a mortgage can be one of the most important decisions as it can last such a long time. Mortgages tend to be for a term between fifteen and thirty years and do you need to make sure you make a good decision. You may be able to change the mortgage after a while, but this is harder to do when you first purchase your property, especially if the value drops in the short term.

Assess your income and situation
You need to start by looking at your income and finances, Work out how much you can afford to pay out each month on a mortgage. Also think about the future and what might happen to your finances. If you think you are likely to lose your job or have a significantly different income, it may be worth considering a more flexible mortgage, where you might be able to miss some repayments or change the amounts that you have to repay.

Consider the future economy
It is worth trying to predict whether interest rates are likely to rise or fall. This is not always easy but if rates are very low then there is only one direction they can go. Think about how you will manage if rates go up and therefore your repayments will rise. You may want to consider a fixed rate to help you to know exactly what your repayments will be over the first years, but this may be more expensive than a variable rate. It will depend if rates change in the fixed rate period.

Compare lenders
You need to compare lenders to find out what types of mortgages are available as well as how much they all cost. You will find that some lenders are a lot more expensive than others. The more well-known ones are likely to be more expensive but you may prefer to go with a name that you know.

Use a financial advisor
An independent financial advisor will have good knowledge of what mortgages are available. They will be able to describe all of the different types to you and help you to decide which is best for your circumstances. They will then be able to let you know which is cheaper and which they feel would be best. Although you will have to pay for their services, it could be a worthwhile investment.

Take your time
As it is such a big decision, you need to take your time. It is likely to be an exciting time for you, but you need to make sure that you are making the right decision and do not want to have any regrets about it. If you know that you have worked hard to research all of the options and picked what you think is best, then you can relax about it.