Finding the ideal mortgage for you is just as important as finding the right property. Fail to do your research and you could end up paying a lot more than you need to. If you’re shopping for a mortgage on a budget, here are a few ways to get the right loan for you.
Fix your credit score
Before you start looking, take some time out to repair your credit score. Most mortgage companies want clean credit ratings, so that they know they’re going to get their monthly payments on time. First, pay off any small debts you have. Secondly, make sure that all your accounts and bank details are set to the same address. Get rid of any old cards you no longer use that may be registered to an old addresses or contain a previous name – these could be giving off false impressions of fraud to lenders. Register yourself on the electoral roll – even if you never plan to vote, it gives you more of a sense of legitimacy and will boost your credit score. For more extreme methods, consider credit-building loans or cards.
Consider a broker
Mortgage brokers are there to shop around for you and find you the best deal. For those with a low credit rating, they may know the best places to approach that are unlikely to turn you down. Brokers will often charge commission, so bear this in mind. That said they could save you thousands in the process. Estate agents can often recommend brokers, although you can also find many online.
Go off the beaten track
Brokers realistically won’t scan every deal, although they’ll claim to. If you’ve got the patience, you prefer to shop around yourself. Some mortgage companies may not deal with brokers and only charge direct – some could have the low fees you’re looking for. Always read online reviews, avoid credit checks where you can and always questions deals that look too good to be true.
Use a mortgage calculator
A mortgage payment calculator can allow you to count up the costs more easily, speeding up comparisons and making it easier to stick to your budget. There are many free online examples of this. Use these every step of the way so that you know exactly what you’re getting yourself into.
Learn to negotiate
You may think negotiating is something purely reserved for the property sale price. However, in some cases you may be able to negotiate a mortgage deal. This probably won’t work with big lenders – their schemes can be tight with little flexibility and you may end up speaking to someone on the phone that says they don’t have the authority to negotiate. However, with more independent mortgage lenders, you may be able to negotiate a better deal. Whilst you can let lenders know you’re on a budget, you don’t want to push the fact that you’re financially hard-done-by too hard, as this could discourage lenders from wanting to make a deal with you. Read up first and encourage them you know what you’re talking about and simply get them to discuss options with you.
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