Things You Need to Consider Before Getting a Mortgage

Getting a mortgage is likely to be the biggest financial decision of your life. Therefore, it’s absolutely essential that you understand exactly what it involves before deciding to press ahead. In these economically uncertain times, it’s easier than you might imagine to find yourself in financial ‘hot water’. So, if you’re considering applying for a mortgage, but are unsure as to where to start, this post will arm you with all the information you need.

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Photo Credit: The Guardian

Affordability

The most important thing to consider is affordability. Lots of things can affect your eligibility as well as what mortgage rate you’re able to qualify for. If you have outstanding loan repayments, or your credit rating isn’t very good, it might be worth exploring other options such as renting. If you live in Hampshire, check out estate agents in Ringwood to get an idea of rental costs in your area. You also have to factor in other unexpected costs, as the majority of estate agents will charge you a fee for a mortgage application. If a bank does make you an offer be sure to read the small print, as there can be other expenses to consider, including hefty hidden costs.

Practicality

Whilst the majority of people dream of owning their own house, the reality of it isn’t suited to everybody. If you like to travel, or your work means that you’re away from home a lot, buying a house may not be the right move. It’s makes little sense to spend money paying a mortgage for a house you’re rarely in, unless of course, you can afford it. Because it’s far better to have one foot on the property ladder than none at all. This in itself, puts you in a far stronger position financially than if you chose to rent instead.

What kind of Mortgage is Best Suited to Your Personal Needs?

Once you’ve decided that buying a house is definitely right for you it’s time to consider what type of mortgage to opt for. There are fixed rate mortgages, tracker mortgages and portable mortgages, to name a few. They all have their advantages and disadvantages, so it’s worth dedicating time to doing some research before making a final decision.

Fixed-rate mortgages offer protection from fluctuating interest rates. However, this means that you could at times end up making higher repayments than the average rate. Tracker mortgages generally tend to be lower than fixed-rate however, they don’t offer the same security. If interest rates happened to change in the extreme, you could find yourself unable to keep up with your repayments. A portable mortgage is worth considering if you don’t plan on staying in a house for long. This allows you to transfer your mortgage from one house to another.

It’s essential that you give proper thought and consider all of the factors involved. If you don’t inform yourself and make wise choices during the decision-making process, the chances are you’ll live to regret it later on. Remember, this will be one of the biggest decisions you ever have to make, so give yourself all the time you need to ensure you make the right one.