What
is the redemption penaltyie what will you have to pay as
a penalty for leaving during the agreed timescale of the deal.
If
you secure a special deal is there any further penalty for
leaving after it's come to an end - ie an "overhanging
lock in".
Check
the mortgage lender's usual variable rate. How does it compare
to the market? If it's higher avoid them because this is what you'll probably
end up paying after the special deal is over (if, like most people, you forget
to move mortgage lenders).
Consider
carefully how competitive is the total cost and terms of the mortgage.
If
you lie - eg about a bad credit history - it will very probably be spotted by
the mortgage lender and screw up your chances of a mortgage.
Honesty is the least complicated and best policy. There are
ways you can successfully get a mortgage if you've got a Bad
credit history click
here to see how
How
to save thousands by getting a shorter mortgage term
Normally
buying a home will cost you two or three times the price you
paid.
For
example, if you borrowed £100,000 to buy your house you could easily end
up paying back up to £250,000 over the 25 mortgage period.
This
is because of the effect paying interest
has on your mortgage repayments.
If
you pay more every month you'll end up paying much less in interest.
Sure,
your monthly repayments will be higher, but the overall cost will
be hugely lowered.
For
example:
Say
you've borrowed £120,000 over 25 years at an interest rate of 10% on a normal
repayment mortgage.
Your
repayments would be £500 a month.
However,
if you increase your repayments to £600 a month
your mortgage would be paid off after 15 years
You
would have saved about £40,000
Pay
even more and you would be looking at even greater eventual savings.
How
to work it out?
Simple.
Just get the mortgage lender to work it out for you.
They
should be able to give you a breakdown of
(1)
Different mortgage periods, eg repaying the loan over 25 years, 20 years, 15 years
and so on.
(2)
Different monthly repayments amounts - which you think you can afford.
(3)
The total you will have repaid by the end of the mortgage
period.
If the mortgage lender's employee won't work it out for you
(which they can, very easily), speak to a manager
and ask if they really do want you to have to go elsewhere.
Despite the impression they may want to give you, all
mortgage companies are interested in your business.
So they should be quite willing to do this.
But
be careful how they handle your overpayments
A
secret trick used by the mortgage lenders is to keep overpayments
(which is what you're doing here) suspended in their own account
until the end of the year. Then they credit it to you.
So
they've earned interest on your money.
Check
what their policy is. If that's how they play it then open your own high interest
savings account. Then pay it all over at the end of the year. That way you gain
from the interest your money earned.
Many
people use brokers for convenience. They'll do the legwork for you and often it
costs you nothing extra because they're happy to do it for the fee they'll get
from the mortgage lender.
However
do note that some lenders try to save money on paying fees to brokers by giving
you a better deal if you go direct.
However,
all you have to do here is take the best quote from a broker and
use it for comparison with mortgages you can buy direct.
Read
enough? Just want a quote? To get
your best mortgage quote quickly and easily we can
put you in contact with a recommended mortgage adviser. It's free,
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