A mortgage is a loan taken out to buy property, typically a home. Mortgages are usually taken out over a period of 25 years; however, the increase in housing prices over the past few years has pushed many first time buyers out of the market – leading to the appearance of 30 or even 40 year mortgages.
There is a lot of choice available for people wanting a mortgage. Most major banks offer mortgages and there are also specific
Mortgage Brokers who can generally cater for a more specific market. If you are
self employed, or even have
bad credit, a mortgage broker could help you. If you are in a high risk category, you are likely going to be subject to higher interest rates and bigger repayments.
A broker will be able to provide you more personalised information and compare quotes for you. They may also be more flexible if you speak to them regarding payment options from
other lenders,
refinance options,
debt consolidation and
credit cards.
Before searching for a home, you should take time to
think about your budget.
How much can you afford to pay back each month? What about if the interest rates you were paying rose by 15%? How likely are you to lose your job and if it did happen, what effect would that have? For that reason, is it worth while paying more each month to gain payment protection or insurance? Consider the advantages and disadvantages of a
fixed rate mortgage against a
variable rate.
Once you have answered all those questions, you can go to your chosen mortgage provider (Bank, Broker etc) and confirm that they are willing to
give you a mortgage. You can then start to look at property to fit your budget. Bear in mind that, while
some mortgages are available that cover 100% of the cost, many lenders will be more willing to help if you contribute to it yourself.
