Mortgage Do’s and Don’ts - dummies

Mortgage Do’s and Don’ts

Part of Buying a Home on a Budget For Dummies Cheat Sheet (UK Edition)

Your home is likely to be your most expensive purchase – ever. So getting the finance right is vital. Check these quick but crucial tips on how to get the best mortgage for your budget when buying a new home.

  • Don’t accept the first mortgage offered to you by your bank. Shop around to see whether it’s competitive.

  • Do use an independent mortgage broker to find a home loan; this can save you time and effort searching the market for the best deal.

  • Don’t overstretch yourself: Work out whether you can afford to meet the repayments if interest rates rise.

  • Do put down a deposit if you can. If you’ve got a deposit, you’ll not only get a better mortgage rate, your monthly repayments will be lower and you won’t have to pay Mortgage Indemnity Guarantee.

  • Don’t get a mortgage with extended redemption penalties. Paying a penalty for switching mortgages before an offer comes to an end is fair enough. But don’t accept a mortgage with penalties that extend beyond this period.

  • Do shop around for buildings insurance. Some lenders charge borrowers a one-off fee if they don’t take out the buildings or contents insurance with them. It may be cheaper to pay this and buy your insurance elsewhere.