Want to avail a home loan? Well, there is no lack of options available but you must be very precise in identifying the best mortgage rate provided by many providers in the financial marketplace of the UK. In fact, this should be your primary objective because sometimes, it becomes challenging by considering the fact that there is much deceptive information across the market. It is the impact of internet, email marketing and other ways of communication like television, billboard advertising that help individuals to understand the significance of how to shop around for the best mortgage interest rates.
Many people fail to identify the best mortgage deal and it generally happens to those, who are the first time buyers or looking for remortgages. They lose patience and trap into wrong offer. The current period requires you to be a smart borrower and therefore, shopping for mortgages should be done with proper research and preparation.
In this blog, a few steps have been explained that can help you up to a large extent.
Step No. 1: Don’t be too much attractive of lender’s advertisement
Lenders are doing their business. It is their right and no one can object it. However, they should exploit borrowers and this is also a reality. Many lenders exist who generally follow the switch technique especially when it comes to the mortgage price. They first show just attractive interest rate but as the time goes by, the small interest rates gradually increases and most of the borrowers are not aware of this fact.
It becomes very tough for the borrowers to step back from the deal especially standing at the middle of the deal and in the end, they have to pay that increased price.
You should not do that and always try to analyse the market and then finalise the loan deal. Don’t get attracted with mere advertisements rather discuss prior to sign the mortgage contract.
Step No. 2: Be specific on Lock-in-Period with the lender
A lock-in-period in the mortgage refers to that process where the lender agrees to hold a particular interest rate for a specific period. Once signed the contract, you are liable to follow the lock-in interest rate beside other costs related to application fee, processing fee, once the loan is approved. It certainly helps in preventing yourself from the increasing interest rates for the time being during your loan is under process.
Many mortgage providers practice variable interest rates. For example, if you have purchased a mortgage of around 4.5% interest rates, as per the market trend, then it may increase to 5% as the rates rising according to Bank of England. Therefore, it is very important to keep an eye on the interest rates whichever quoted by the lender. It would be better to opt for fixed rate mortgage while signing the contract.
Step No. 3: Understand the basics behind APRs
Most of the lenders use the marketing strategy to show attractive Annual Percentage Rates (APRs) each time in order to attract a large number of people. As a mortgage borrower, you should use calculators are much as possible to get the right idea about the APRs and the repayment terms but wait, it is important to mention here is that lenders usually calculate the APRs in different ways.
They may highlight low interest rate but do not fall ahead of the advertisements. Instead, you should focus on the better communication with the lender and convince him on the affordable APRs on your mortgage. One more thing is crucial to mention here that the lenders are bound with the law of the state and they have to finalise APRs accordingly, which as a borrower you have to follow it.
Step No. 4: Analyse the given quote carefully
Mortgage is about large loans where you have put your collateral at risk. It is totally opposite and different from small loans where one can hurry up the things and process accordingly. However, mortgage requires a deep research as well as analysis. It becomes more important when you get a quote from your lender. Remember, your focus should not be on just the interest rates because there are other points too to consider.
For instance, you have to consider, what would be the mortgage period? How will you manage the borrowing money? How to make the repayments without disturbing family budget? The total length of the loan will definitely make an impact on the upfront charges. Clear everything with the lender prior to proceed further under the contract.
Step No. 5: Go through the lender’s background and trustworthiness
It is a must do step that one should follow if approaching for a mortgage deal. The financial marketplace of the UK is huge and there are plenty of lenders working with mortgage deals for first time buyers, moving home, for bad credit people, or for commercial purposes. Whatever your purposes is, make sure that you perusal the lender’s history in providing the mortgage deals. Explore search engines to read reviews about them and then prepare a comprehensive list of lenders whom interest rates you find manageable and genuine.
Make your selection clear or you can also ask a few financial experts what you should do or not. But you should know that nowadays there are many reliable mortgage lenders in the UK providing fully customised offers to match individual circumstances.
In the nutshell, mortgage rates may be low now but they may rise all of a sudden. When you have made up your mind to indulge in a mortgage deal for your personal or commercial purposes, a thorough preparation becomes necessary. Here, we have tried to familiar you with what steps you should follow in order to become a smart mortgage rate identifier. Besides that, you should be very responsive to your lender because any confusion will affect your chances of getting the right deal. Lenders such as Shine Mortgages are ready to assist you but you have your own responsibility to utilise the borrowed amount and repay it with extreme sincerity.