The Money Saving Expert website offers advice from Martin Lewis and his team on what to do when looking for a cheap mortgage deal. But before even looking at the various deals out there, the site advises customers to make a decision on what kind of deal they want. For example, you will likely be offered the choice of an interest-only mortgage or a repayment mortgage.
In an article from March, Money Saving Expert advised: “If you pick interest-only, you need a separate plan to pay off your debt, as your payments only cover the cost of the interest.
“A repayment mortgage, while it costs more each month, pays off the original debt too.
“Unless you have a compelling reason, repayment is the way forward. It’s also the one you’re most likely to get as many lenders won’t offer interest-only deals.
“Those that do will want evidence of a credible repayment plan and might limit the amount you can borrow.”
A second conundrum when getting a mortgage is the choice between fixed term or variable.
Money Saving Expert says that while variable rates have been cheaper in previous years, the “pendulum has swung the other way”.
The article adds that they are creeping up in price again, and ultimately what is important is to pick what is right for you, and you can find advice from the website’s guide.
Money Saving Expert uses the example of someone who has a 9.75 percent deposit or equity – if that person ups that figure to 10 percent they will be able to get a lower interest rate.
The article adds: “If you’ve done all this, you’re ready to follow the steps below to find the best mortgage for you.
“Remember that even if you’ve got an agreement in principle with a lender, you don’t have to stick with it – especially if it is no longer offering the best deal”.
Published at Mon, 11 May 2020 09:40:00 +0000