If you’re currently shopping around for a mortgage, you will understandably want to get the best deal possible.
As your mortgage payments will be a large monthly expense, it makes sense to find something that won’t put too much of a dent in your bank account.
For this reason, the following steps are advised.
#1: Shop around
Your bank might be your starting point when trying to get a mortgage, as they might be in a position to give you a loyalty discount if you’re a long-standing customer.
However, there could still be a better deal out there so don’t assume you are being offered the best mortgage rates. For this reason, it pays to shop around.
Use online comparison sites, schedule appointments with various lenders, and search for those mortgages that are specific to your situation.
We are thinking of special first-time homebuyer loans or VA loans, as examples, where special deals might be presented to you.
Speak to a mortgage broker too as they might have knowledge of mortgages deals that aren’t available from your local high street.
#2: Check your credit report
When making your mortgage application, lenders will calculate how much risk you pose as a borrower.
In some cases, your application could be turned down if you are deemed to be a risk.
In other cases, you might still be offered a mortgage but with a higher rate of interest.
Lenders measure risk by looking at your financial records and by assessing your monthly income.
They also look at your credit report. If your credit score is low, you can expect the rate of interest to go up on your mortgage.
For this reason, it is important to check your credit report. If there are any mistakes, you should follow the credit dispute steps here.
If it is low, perhaps because you are still in debt or have a record of defaulting on your payments, you should do what you can to improve your credit rating.
Do this before applying for a mortgage as this will determine the rate you are offered.
#3: Pay as large a deposit as you can
The larger the deposit you put down, the less you will need to borrow.
You should also benefit from a lower interest rate this way as the lender might perceive you as less of a credit risk.
The best deals often go to those who can put down 40% or more, but pay what you can reasonably afford.
You might still get a good deal if you put down a deposit of 20-25% of your mortgage.
Of course, this can be easier said than done. Not everybody has the means to make a large deposit. However, if you can make savings each month by keeping your finances in check, you should be able to put money away for your deposit.
First-time homebuyers can often benefit from government help with their deposit so if this applies to you, find out what you are eligible for.
These are just some of the ways to save money on a mortgage but there is always more you can do.
Continue your research online and browse any related articles on our website.
By taking the right steps, you should be able to get a mortgage deal that is affordable to you.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)