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Your home is likely to be the most expensive thing you ever buy as well as your biggest monthly outgoing.
Most people take out a mortgage for around 25 years and they pay a lot of interest to their mortgage lender over that time.
Getting the best deal that you can find is a clever way to reduce costs and keep more money in your pocket, but how do you find those excellent deals?
Research
Many people do their homework before they buy their first home to make sure that they have the best mortgage deal, but once they move in, they let things slide.
They may have found a good deal to start with, but the chances are this deal won’t last forever and once it has ended, your mortgage can get more expensive.
Mortgage deals are changed regularly and just because a lender was at the top of the list when you took out your mortgage, they are unlikely to stay there for long as lenders compete to get business.
If you are moving home or your existing mortgage has come to an end, then shop around for a new deal. This can save you a lot of money over the term of the mortgage.
Reduce the Lender’s Risk
Mortgage lenders don’t like taking risks and will charge accordingly. This means that if you have borrowed a lot of money in comparison to the value of your home then your mortgage is likely to be more expensive.
Saving up a bigger deposit before you buy a home will give you access to better deals. For example, 75% LTV mortgages (loan to value) are offered with a much lower interest rate than 90% LTV mortgages.
More lenders are happy to lend money on 75 LTV mortgages too which means that you will have more options and are likely to find a better deal.
Improve Your Credit Rating
If you have a poor credit rating, then some of the best deals won’t be available to you. If you want to have more choices, you need to improve your credit rating.
You can check your credit rating online to check your score and see how creditworthy you are. There are ways to improve your credit rating if it is low right now and taking measures now will give you access to better deals in the future.
Factor in Mortgage Fees
Some mortgage rates look good but once you read the small print, they have very high set-up fees which can make the deal look less attractive.
These can often cost you more money overall than mortgages with more expensive interest rates that have lower set-up fees. Make sure you check the cost of the mortgage over the whole term to ensure that you are signing up for the cheapest rate overall.
With some careful research and regular reviews, you can make sure you get the best deal on your mortgage for the duration you have it and save yourself a lot of money over the long term.
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