When applying for a mortgage, one of your most important responsibilities is determining if that mortgage is really right for your situation or circumstance. For instance, can you really afford it? Will the mortgage repayments allow you to still live comfortably and take care of all your other expenses? Will you be able to afford the mortgage plus other expenses associated with buying property, such as taxes and fees as well as the cost of moving? There are many reasons why you need to choose your mortgage very carefully. Here’s how to know the best kind of mortgage deal for your needs.
The importance of the right mortgage
The importance of finding the right mortgage can’t be denied. With the right mortgage, you have a better chance of eligibility and approval, for one, and you can also have a better opportunity to save money, especially when the mortgage comes with lower repayments and a lower cost overall. With the right mortgage, you have the extra peace of mind and guarantee that you will be able to make the repayments without sacrificing too much.
Aspects affecting the kind of mortgage you can get
There are different aspects which may affect the kind of mortgage you can get, such as your deposit, the term of the mortgage, and more. For instance, if you have a large deposit, you may be able to get a better deal. Consider this: if you have been able to save £20,000 and would like to purchase property that costs £100,000, then your saved deposit would make up 20% of the property’s price. This means that the mortgage you should apply for would have to make up 80% of the property’s remaining value, which is called the loan to value (the LTV is 80%).
A mortgage with a lower loan to value would be cheaper since you are considered less of a risk by lenders. This is why it’s important to have a higher deposit – besides, having a higher deposit means that you may get lower rates and fees as well.
The term of your mortgage can also affect your repayments; the longer the term, say, 40 years, the lower your repayments, but the more you may have to pay for the overall mortgage.
Getting advice from a mortgage expert such as one from mortgage-wise.co.uk is crucial if you want to acquire the right mortgage for your needs. This is especially true if it’s your first time to apply for a mortgage. In general, a mortgage advisor can present you with various options when it comes to different kinds of mortgages that are suitable to your income and situation; they can assess your situation and come up with the most feasible deal for you.