Mortgage Advice

Guide to shopping for the best mortgage

As taking out a mortgage will probably be the biggest financial decision you’ll make, it would be a massive understatement to say that you should shop around for the best deal you can possibly get. There’s a lot to learn about mortgages, so it would be a very wise thing to talk to a number of lenders, more than once if necessary, and compare the various mortgage deals they offer. Study carefully the terms and conditions of the mortgage plans they sell, and don’t sign any contracts until you are completely satisfied with the deal you are getting. Remember that just a tiny fraction of difference in the interest rate can mean thousands of dollars/pounds/euros etc. over the long haul, and of course it’s better to keep that money in your pocket rather than giving it to the bank’s shareholders.

Compare apples with apples

As we touched on earlier, there are many different types of mortgage plans on offer. All have their various quirks and characteristics and will appeal to different market sectors. When comparing the mortgage deals of two or more different lenders, it’s important that you compare the same type of mortgage (i.e. fixed rate) from different lenders. This will ensure you have a better idea of whose mortgage offering is the better deal.

Don’t forget the other charges

Banks and other mortgage lenders are notorious for included a myriad of other charges such as set-up fees, early termination fees etc. Make sure you get your lender to explain clearly any additional costs or charges outside of the monthly payments.

Late Payments

Find out if your mortgage lender allows for a grace period after the mortgage payment due date. Everybody has tough months, financially speaking, and there will be times over the course of your mortgage where you might miss a payment or two by a few days or so. Grace periods can end up saving you substantial amounts in penalty fees and other charges, and may keep late payments from having a negative impact on your credit report.
Tell them why they didn’t get your business

If you’ve taken the time to compare a number of different lenders for the best deal, make sure to inform any ‘close seconds or thirds’ about why you didn’t take their mortgage offer. If your reasons are from a purely financial point of view (for example, their set-up fee was too high), you may find they’ll make a counter offer to get your business. It may not always work, but you could end up saving a substantial amount of money just through a little communication.