Buying a property is one of the biggest purchases you’re likely to make, and your mortgage will probably be your single biggest outgoing each month.
Most people choose a mortgage based on the rate or a preference for a particular mortgage provider, but your decision may have an impact later in life. When you choose your new mortgage you should make sure you are aware of any potentially expensive aspects of the loan before you sign on the dotted line.
So we sat down and asked our West Cumbria Branch Manager, what are the crucial questions a customer should always ask their mortgage advisor and this is what she told us…
How do you calculate the amount I can borrow?
Lenders will work out what you can afford to repay each month by looking at your income and expenditure in detail. How lenders work this out may vary, and different lenders will lend you different amounts. The most important things are that you can afford the repayments, and you have considered the implications of interest rates rising.
What does it cost to arrange the mortgage?
Increasingly, lenders are offering what appears to be a good deal, with an attractive rate of interest, but adding a high mortgage arrangement fee. This may mean a mortgage with a slightly higher rate of interest, but lower arrangement fee is actually a better deal.
Is there insurance attached to this deal?
Sometimes a cheaper deal is available if you take out house and contents cover. You should always ensure you are appropriately insured, but if you take out insurance as part of a deal, make sure you need it, and that it isn’t priced excessively.
What is the redemption penalty period?
If you switch or repay your mortgage during the period of the deal, or for a stipulated period after it ends, you may have to pay an early repayment charge. If you think that your circumstances are likely to change you should consider a flexible or offset mortgage, which will allow you to make unlimited over-payments without penalty.
Is the mortgage portable?
If you move home during the period of your mortgage deal, you may have to pay your early repayment charge, even if you stay with the same lender. Check this, especially if you are tying yourself in to a long-term deal of three years or more.
Can I make partial repayments without penalty?
If you get a pay rise or receive an unexpected windfall, you may wish to pay a little more off your mortgage to reduce the term. Check whether you can do this without being charged, and if so, the amount you are allowed to pay off each year without any penalties.
Here at The Cumberland, we offer a hassle-free mortgage service and can help in a range of ways:
✔ We offer a range of competitive products;
✔ Our team of expert underwriters will look at your individual, specific circumstances;
✔ You can speak to our team about your application 7 days a week, up to 8pm weekdays.