1. Save a deposit.
If you can save or borrow 5% of your house price then most mortgage deals will become much more attractive. Generally 100% mortgages are more expensive and you may also have to pay mortgage indemnity insurance. If it is difficult to save for your first mortgage consider a loan from friend or parents to get you on the mortgage ladder.
2. Don’t be put off by House price speculation.
Some people worry when the best time to buy a house is. Because some analysts predict house price falls many first time buyers think it is best to wait a couple of year. However remember people were predicting house prices falls 5 years ago. Since then house prices in many areas have increased 100%. If you buy a house to live in, rather than speculation, then it doesn’t matter if house prices do fall a little. – As long as you don’t have to sell to pay back the house.
3. Mortgages are better than Renting.
If you are paying £800 a month renting you have nothing to show for it. In the future you will need to keep paying rent and rent will probably rise in line with inflation. Mortgages may last for 30 or even 40 years, but there is light at the end of the tunnel. Consider a mortgage a saving for your retirement. – You are saving on future rent payments.
4. Don’t be discouraged by High House Prices. – True house prices are very high in the UK, but this doesn’t mean you can’t get a mortgage. Look around at different mortgage deals, if necessary consider a self certification mortgage.
5. Joint Mortgages –
A a joint mortgage is a way for first time buyers to get on the property ladder. Basically it involves getting a mortgage with somebody else. If you are confident you can have a good financial and living relationship then a joint mortgage may be the way forward.
6. Remortgage.
If you are an existing mortgage owner don’t assume you are on the best deal. Most lending institutions rely on the inertia of existing customers to make most of their profit. If you are on a standard variable mortgage it is highly likely you can get a much better deal. This could potentially save you £1000s of in money back.
7. Exit Fees Refund. In the UK the FSA recently announced that many banks were wrong to change the charge for switching to another mortgage. If you remortgaged in the past couple of years, you may be entitled to a refund. Check it out with your local bank.
8. Financial Planning.
Make sure you are always in a situation to pay back your monthly mortgage repayments. If you miss payments it can make it more difficult and more expensive to get a mortgage in the future. If necessary discuss with your bank a pre arranged overdraft.
9. Current Account Mortgage.
If you have a significant savings in your current account you could use this to offset your mortgage payments. This is very advantageous for higher tax payers because you save on both interest on your mortgage and paying tax on your interest.
10. Consolidate Loans.
Having a mortgage enables you to get additional secured loans. Thus if you have large credit card debts then you can remortgage to gain equity withdrawal these funds can then be used for paying off your credit card debts. The debt hasn’t fallen but you will reduce your debt interest burden.
