Securing a mortgage
A mortgage is a type of loan that you can take out to fund the cost of buying your home, and it’s secured against the home itself.
Finding the right mortgage for you
The best mortgage deals are usually available when you put in at least 15% of the home’s value. If you put in less than 10% you might need to pay a ‘Higher Lending Fee’ (sometimes called a Mortgage Indemnity or a Mortgage Guarantee Charge) which will add to the total cost of your mortgage. Here are a few things to consider when you’re starting the search for a mortgage:
- To get an idea of mortgage rates you could qualify for head to a comparison site like Money Saving Expert or Compare the Market
- Sometimes your bank might offer preferential rates so it’s worth contacting them to find out if they have any deals
- Consider working with a mortgage broker or financial advisor; they sometimes charge a fee for their services but can normally get access to better rates than customers approaching lenders directly
- Lenders will look at your (and anyone who’s applying with you) credit history and income. If you want to check your credit history yourself you can contact one of the main credit reference agencies like Experian or Equifax and challenge anything you think is incorrect
- When you’re offered a mortgage make sure you’re comfortable with the terms and long-term affordability
Mortgage in principle
Getting a mortgage in principle can help speed up the home buying process, making it quicker to secure a mortgage when you find your dream home. Your lender will give you a summary called Key Facts Illustration, which shows the total cost of the mortgage, interest rate, penalties and other conditions. But don’t do too many applications as some lenders will do a full credit check, which will affect your credit file.