Mortgage Tips

  • Pay off your capital early -
    If you have an interest-only mortgage, such as an endowment or ISA mortgage, you could pay off your loan early by making regular additional repayments against the interest.
  • Get a cheaper standard variable rate -
    Mortgages usually revert to these rates once a discounted or fixed period has expired. As with mortgages in general, they can vary from lender to lender so it is worth shopping around for the best deal.
  • Change your interest calculation -
    Daily interest calculation has been established for a while in other parts of the world but more and more lenders over here are switching to it. Basically, the advantage of switching to this calculation is that if you make a repayment it immediately impacts on the interest accruing on your mortgage.
  • Remortgage for a smaller loan to value -
    Chances are your property has increased in value since you took out your original loan. Therefore, the percentage of the loan to the value of your property will have decreased as well. So it could be well worth investigating whether you can get a better deal - many lenders offer significantly better terms for people borrowing less than 75% LTV. Make sure you have your property valued properly though, and shop around for a lender that will cover your valuation fee.
  • Reduce your mortgage term -
    If you feel you can afford to pay out extra each month, you can reduce the term of your mortgage, which will save you on interest.
  • Don't take out a Mortgage Indemnity Guarantee (MIG) -
    MIGs are now usually only charged on loans of 90% to value or more and there is a campaign to have them scrapped altogether. A MIG is a one-off payment made to the lender that protects them if you fail to keep up your repayments and your home is repossessed. If you can avoid paying for one, do, it will save you money.
  • Get cheaper household insurance -
    One of the easiest ways to reduce your household outgoings is to shop around for your buildings and contents insurance. It's all too easy to buy from your lender as it's convenient to have everything tied up with the one company. But search the market and you could save a packet.
  • Check your mortgage payments are correct -
    It may seem stupid but auditors MortgageChek say there's a one in ten chance you could be paying more than you should. Do the maths. Ensure you review your mortgage regularly - Perhaps it isn't the way you'd choose to spend your free time but regular reviews and possibly remortgaging will ultimately ensure you pay as little as possible in interest.

First Time HomeBuyers

  • Sort out your finances. Find out how much you can borrow, get a mortgage offer in writing and find a solicitor to do the conveyancing - get one who isn't overworked.
  • Write a search brief. List your 'must haves' and be as specific as possible. List the bonuses and no-nos. This will keep you focused and stop you falling in love with other people's lifestyles.
  • Use the Internet for initial property research. Most agents have their own sites. Visit a few estate agents in a couple of locations and ask their advice. Explain you're on a search-mission only and talk to them about your needs - budget, space, where you work, preferred schools, leisure pursuits. Prepare a 'Buyer's Pack'. This shows you're serious and can proceed speedily. This should include a mortgage offer, evidence of the deposit you have available, solicitor's details and all your contact numbers. Phone weekly. Don't wait for details in the post, make weekly calls to your agents to find out about new instructions.
  • Begin viewing. Once satisfied a property fits your search brief, begin viewing and make sure you turn up on time. View carefully and take notes of the layout and size. Consider how rooms might be changed - remember only two things can't be changed - location and light. Have a second view at a different time of day, preferably at night.
  • Decision time. If you want to buy, make an offer in writing. If you think the asking price is high, start negotiations with a lower 'shot across the bow' offer. Do not let go. To ward off gazumpers and make vendors feel morally bound to proceed, hassle your mortgage company to arrange the survey and communicate regularly with solicitors and estate agents.