Taking out a mortgage is probably the biggest financial decision you will ever make. So, it’s important you get it right. At My Mortgage Maker, we want to help you understand some of the fundamentals of home loans.
So, we’ve put together a list of some of
the most important questions you should ask to make sure you get the best deal
and the best terms on your mortgage.
How much can I borrow?
In most cases, you can borrow 4.5x your
annual salary so a simple calculation will give you an idea of how much you can
borrow. However, if you are borrowing at a low loan to value (LTV), you may be
able to increase that amount as the risk to the lender is lower.
How much deposit do I need?
This varies and it is perfectly normal for
first-time buyers to borrow 100% of the amount needed to buy their home. If you
are able to get together a deposit to put down, though, you are more likely to
be offered a more favorable interest rate. The best rates are generally
reserved for borrowers who have a deposit of more than 40%.
What’s the difference between
fixed-rate and variable rate?
A fixed-rate means you know the rate of
interest you will pay for a set number of years – usually 2-5 years. This is
the most common type of mortgage as it provides stability and makes budgeting
easier.
A variable-rate changes according to the
Bank of England base rate. You will pay less when rates are low, but repayments
can get high if rates rise.
To make sure you get the best deal, speak
to a mortgage broker. Our advisors will discuss your circumstances and
advise on the best lender for you.
For mortgage advice in Woking, Bristol
or Bath, get in touch today to be matched with a mortgage broker.
