Finding the best buy mortgages for you
With so many mortgage products available on the market today it can be difficult to find the best buy mortgages for you. When you go to find the right mortgage for you, you will find countless choices, including variable mortgages, fixed rate mortgages, tracker mortgages, capped rate mortgages, first time mortgages, buy to let mortgages, remortgage options and much more.
However, you should take your time and do your research, or even get some financial advice to point you towards some bust buy mortgages. By the time you have paid off you mortgage, you will probably have paid more in interest than the value of the house itself.
Therefore, it makes sense to shop wisely at the outset as even a seemingly minute difference in interest charges could save you thousands of pounds over the term of the loan.
So, when you look at any mortgage product be sure to calculate exactly how much interest you will pay over the full term. Many products offer special introductory rates that can be deceiving as the rate could rise significantly after the first couple of years.
You also have to decide what is the best buy mortgage for you. Some people prefer the security of a fixed rate mortgage. You can usually fix for one, two, three, five or ten years. This means that your monthly payments will not vary for the agreed fixed term.
The disadvantage of this is that if interest rates fall during the fixed term, you will not benefit from lower repayments. On the flip side, you will benefit if interest rates go up. Or you could choose to pay the standard variable rate with a variable mortgage.
When you are choosing the best buy mortgage for you, also be aware of fees and charges that banks impose and factor this into the overall cost of the loan. Some of the most common fees include set up fees, redemption fees and exit fees.
Set up fees are charged by many mortgage and re mortgage lenders for initially setting up the loan. However, be sure to shop around. Not all lenders will charge this so try to find one that does not.
Redemption fees are incurred if you pay off all or some of the loan early if it is a fixed term loan. They may also apply to remortgages. These fees are usually not levied with variable or tracker mortgages. If you want flexibility when it comes to early repayment, find a lender that does not charge redemption fees.
Exit fees are similar to redemption fees. They are charged when you pay off your mortgage early or move to a different lender for a best buy mortgage. Recent rises in interest rates have seen more and more people switch to lenders offering lower interest rates.
This prompted many lenders to raise exit fees from around £50 to as much as £300. However, a FSA investigation this summer found this to be illegal in many cases and many people have received refunds. However, you should watch out for prohibitive exit fees if you are taking out a new mortgage.
When buying a mortgage, also see what kind of deals your lender offers on fast secured loans.
To find best buy mortgages or the best loan you will need to find the best lender. Between bank mortgages, building society mortgages and online products, this means a lot of research. There are plenty of cheap UK mortgages available and thankfully, the internet has made this information much more accessible and there are good product comparison websites available online.
