After years of oppression, the housing market is slowly showing signs of improvement. Government schemes like NewBuy, HomeBuy and Funding for Lending helping to boost the number of first time buyers able to be approved for home purchasing loans. A five year high of first time buyers has recently been reported for 2012, meaning that new buyers are beginning to edge their way into the market. However, through overall mortgage rates are lowering, the application fees for fixed rate mortgages are rising, leaving us wondering whether it is the best deal after all.
Since June 2012, the number of products available has risen and the average rate has fallen dramatically, however that doesn’t necessarily mean that is the cheapest deal available. Fixed rates are appealing to those who want certainty in the future and don’t feel that they can keep up with rising rates due to soaring inflation or falling exchange rates. Though fixed rate mortgages can be quite low, some lenders are offering them with extortionate booking and application fees, thus meaning that buyers are paying for more than they thought. Many also charge a fee for completing payment of the mortgage before the fixed rate time period is up. There are some who are offering reasonable application fees, so the advice is to shop around or employ a mortgage broker.
The amount of time that you can fix your mortgage rate varies from two years to ten, and depends on the size of your deposit. The larger your deposit, the better the rates will be. Those with only a five per cent deposit may find it more difficult to find a fixed rate mortgage, but as the government schemes start to take affect then they should start to become more and more widely available and easy to access.
Getting a Mortgage: How to Succeed in the Housing Market
There are a few essentials that you must do to give yourself the best chance of getting a mortgage. There are, namely: -
Get Rid of Your Debt
Start budgeting and pay off those store cards, credit cards and any debt that you may have. Take a look at your credit report through companies like Experian and make sure that it is correct. If it isn’t, make sure that it is amended as this could affect your application negatively.
Register on the Electoral Roll
Do this online or by paper form, but make sure you do as it can mean that your identity and addresses are easier to prove.
Save as Much as Possible
The ideal deposit amount is twenty per cent of the property price. However this isn’t possible for most people, so most aim for about ten per cent. If you are enrolled on a government scheme then you can have as little as five per cent, but if you can save more, then do.
Be realistic about what you can afford, otherwise you will end up with repayments piling on top of you. Don’t go over your head and though it might mean a compromise now, you won’t regret it later.
Get a Mortgage Broker
They are invaluable. A mortgage broker will know the market and its products better than you ever could and so will be able to find the right mortgage for you. Visit www.themortgagebroker.co.uk for more information on fixed rate mortgages.