A guide to mortgages

Buying a home with a mortgage is easy through Regency Residential

In order to buy a home, you may require borrowing money from a lender. Often this process can appear complex, but in fact, there are only some basic things you need to take into consideration.

These are the main considerations when applying for a mortgage:

What is a mortgage?

Understanding the different types of mortgages available and the mortgage process can help you know when you might be ready to reserve a property or make an offer. There is a wide range of borrowing products and mortgages available to pay for a home. In fact, there are hundreds of types of mortgage products and several mortgage types depending on your circumstances. Getting a mortgage will be one of the biggest financial decisions you’ll make, so it is important to get it right.

This guide aims to help you decide where you can best source helpful advice from mortgage specialists and advisors.

There are many mortgages on the market and they are very competitive so it can be hard to understand what is on offer. It is a good idea to get advice from your bank as well as a number of independent mortgage advisors before coming to any decisions. An independent mortgage advisor is a specialist with in-depth industry knowledge of the industry. They’ll look into a range of mortgage products made available by the different lenders to find you the best mortgage to suit your needs at your budget.

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What to look for in a mortgage

It is important to understand all factors associated with a mortgage product, it is not always a case of looking for the lowest interest rates but elements that will benefit your needs.There are other factors which also contribute to the total amount you pay back to the lender over time.

  • PRC: (Annual Percentage Rate of Change) takes some mortgage fees into account as well as the interest rate and expresses it as a percentage.
  • Deposit Amount: The higher the deposit you put down the lower the interest rate you are likely to get.
  • The Standard Interest Rate: Your mortgage will switch once your fixed rate deal ends.
  • The Frequency Of Interest Charged: Daily interest tends to work out cheaper, however, there are options to pay it monthly or annually. will it be paid daily, monthly or annually? Daily interest works out cheaper.
  • Flexibility: Would you like to have the flexibility of being able to overpay your mortgage or being able to take a break from making payments without being charged.
  • Length Of Fixed Rate Vs. Variable: Are you happy with having an interest rate that is fixed for a long period or would you like to have more flexibility? Charges will be issued if you choose to switch your mortgage deal before it ends.
  • Mortgage Advice: Lenders and financial advisors are closely regulated and when they recommend a mortgage to you they must offer advice. When recommending a mortgage they will assess your income in order to establish your ability level to meet mortgage repayments. Mortgage advisors will look into your day-to-day spending. The process is there to protect you and to ensure you purchase a mortgage that suits your needs.

Despite the fact that mortgage advisors and lenders must offer advice, you can choose to reject advice and find your own mortgage deals based on your research and decision process.

Choosing to apply for a mortgage without advice is called an ‘execution-only’ application. Getting advice when moving forward with a mortgage will enable you to have more rights if the mortgage turns out to be unsuitable for your needs. If it came to a stage where you needed to make a complaint regarding your mortgage then you could make a complaint for financial miss-selling if the advice you were provided with turned out to be unsuitable for your circumstances.

If you don’t take advice then you take full responsibility for your mortgage decision. You could therefore potentially end up with a costly mistake in the long run.

If you don’t understand restrictions properly when applying for a mortgage then you can potentially be rejected by your chosen lender.

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