subject: 4 Tips to Get Your Mortgage Right [print this page] Whether you've already decided on a mortgage or simply try to learn more before making the decision there are a few things you should really know. The mortgage is biggest loan you're most likely to ever apply for so it's fairly important to take guesswork out of the process.
Think it over
First of all, you should know what the responsibilities of a homeowner are. There is a world of difference between renting a house and actually owning one. Even though at first it seems that by avoiding rent you automatically save money but that may not be the case - think of all the maintenance that needs to be done. Whenever boiler goes down it's your responsibility to pay for repairs, same goes for installing double glazed windows and central heating. Unless you're a professional who can do all the work around house, it's best to buy a property in a good condition to avoid the extra costs.
Assess your financial capability
Obviously you will get the best house your mortgage will allow you to afford. You do, however, need to decide on the mortgage length and make sure the monthly repayments will not affect your budget too much. The prospect of owning your property is very tempting indeed, but you do not want to find yourself struggling with repayments and stressed over repossession.
Generally there are two types of mortgages available which offer you with some flexibility during the first couple of years. The interest only mortgage will reduce monthly payments for a year of two. It may leave more money to decorate the house and further increase it's value but at the same time it does not increase your equity. The repayment mortgage, on the other hand, gives you the chance to pay off interest and capital of your mortgage at the same time but is more expensive.
Shop around
Current mortgage market is very competitive and brokers are willing to go a long way to get new customers. Great deals pop out now and then but in order to find one of those you need to stay on top of your mortgage search and shop around a lot. Keep in mind that a couple of weeks now could save you thousands in the long run.
Read the small print
Even when the search is over and you're certain that a particular mortgage broker offers you the best deal, don't let your guard down just yet. I can't stress enough how important it is to read all terms and conditions of your contract. You may be surprised to discover outrageous early repayment charges and other terms you would otherwise not agreed to, so even if you're not very confident with the paperwork ask someone who is.
