You’re sure you’ve got the best mortgage deal – but are you really sure? You may have sussed the fundamentals, but there are some ‘mortgage surprises’ that your extensive studying may not have flagged up.
Not nice surprises like finding a fiver on the floor or getting a bunch of flowers after a tough day, but the kind of surprises that could leave you out of pocket when you come to take out a mortgage.
Did you know, for example…?
Best rates don’t always mean the best deal
You shouldn’t judge a book by its cover, and neither should you judge a mortgage deal by its interest rate. A provider may have lured you in with a low rate, but they might be offsetting this by charging high arrangement or valuation fees. Costs vary between providers, so you need to look at the whole picture and think long-term.
Your credit rating counts – a lot
You’re aware that your credit rating helps you to secure a mortgage, but did you know it informs the deals you’re offered? A spotless credit history could give you access to providers’ best rates – if you know your score could be improved (even marginally) it’ll be worth your effort. Cancelling credit and store cards you no longer use, clearing debts and getting on the electoral register will all help boost your rating.
You should hold off on changing jobs
If you’re looking to change jobs, it can be a good idea to stay put until you’ve moved in. Certain providers won’t lend to people unless they've been with the same employer for one year, while others request three years minimum. It could also affect the amount you’re able to borrow; and besides, do you really want to deal with a new job and new home all at the same time?
Brokers don’t compare the entire market
After a few one-to-ones with your mortgage broker, you almost feel like buddies. But, pledging your allegiance to him or her may not work in your financial favour. Brokers work on behalf of a wide range of lenders, but they don’t have access to the entire market. So it’s always worth seeking a second (or third) opinion.
Mortgage in principles aren’t set in stone
You spotted what you thought was a great deal and got yourself a mortgage in principle – but now you’re having doubts. Don’t worry; the principle isn’t set in stone and you don’t have to stick with that provider. Besides, the mortgage in principle is only valid for a period of 60-90 days, so there’s a good chance you’ll have to renew it anyway.
And just for fun…
The term mortgage means ‘death pledge’
To end on a cheery note, the word ‘mortgage’ originates from the French phrase ‘mort gage,’ which translates as ‘death pledge.’ According to folklore, French peasants would work up until they died for the privilege of owning a house. Although it might just mean that the deal dies when the debt is paid!
Now you know some of the ins and outs of mortgages – and the surprises that come with them – you can get to work on ensuring you secure yourself the best deal out there for you. Good luck…