The following is a guest post…
Whether you are a first time buyer, or an existing homeowner, choosing the finance for your home can be difficult and even stressful at times. To help you to do so, we have compiled a step-by-step approach to selecting the right mortgage.
Check your credit history
There are many reputable companies who provide credit checking services. Banks and other lenders will certainly be looking into your financial history when considering a loan. As such, it pays to have this knowledge in advance, primarily so you know that you will be accepted for a mortgage.
Work out how much you can afford to take out
Think carefully about how much money you (and your partner if appropriate) earn and your living costs on a monthly basis. Factor in any previous debts you are paying off, childcare, bills, food costs and social expenditure. Putting in the time to do so will leave you with a realistic amount that you are able to dedicate to a mortgage.
Compare different types of mortgages
The main types of mortgages are repayment, interest-only or endowment. Repayment mortgages consist of the buyer paying a certain amount back each month. The amount in question will vary according to interest rates. Interest-only mortgages are mortgages whereby you purely pay the interest on the debt during the life of the mortgage. At the end of the term, you are left with the lump sum to pay. An endowment mortgage is where a buyer uses an endowment policy to save money to repay the loan at the end of the term.
Shop around different provider to find the best mortgage rates
It can be tempting to take up on the first offer which sounds suitable. However, your hard work will pay off if you take the time to consider different mortgage rates. Some rates may appear higher, but will also include added benefits such as life or contents insurance, or a fixed interest rate for a certain amount of time.
Ensure you will able to pay the mortgage by seeking financial advice
There is still much to be said for speaking to an Independent Financial Advisor about your options before committing.
By following these tips, you will find a mortgage to suit your needs. Best of luck in your search!
About the author: Susie Francis is a newly married woman, searching for the best mortgage rates in the Toronto area. She is looking forward to finding the perfect house!