Our Maji Money Hero Martyn Allen is here in the second part of our series to help you avoid the ten most common mistakes before getting a mortgage.
6. Applying for credit ahead of securing a mortgage
Many people don’t realise how long a hard search can stay on your credit file and how credit applications can impact the rates you’ll get on your mortgage. If you don’t need a new credit card, loan or mobile phone contract in the 6 months ahead of your mortgage application, it’s best to not apply for it, to ensure you get access to the best deals on the market.
7. Not considering your remortgage early enough
Many people don’t realise you can begin the remortgage process as early as 6 months before your current deal comes to an end. Looking at the rates available beforehand means your broker can ensure you’ll get the best deal at that time and enables you to continue searching for better deals up until your current fixed rate ends.
8. Not taking the time to consider product options
I often say to clients that most people spend more time picking out a pair of shoes than they do shopping for a mortgage. Before you lock into a two-year or five-year fixed rate, make sure you have a think about what you think the next few years might bring. For example, if you’re buying a 1 bed flat with your new partner and considering having children in the next few years, perhaps locking into a five-year fixed mortgage isn’t the best idea. Although there are often options to port your mortgage to a new property, it doesn’t always give you access to the best rates.
9. Reverting to the bank’s standard variable rate
It rarely happens these days however, it’s worth pointing out that lenders’ SVR (standard variable rate) is often very high. In order to prevent your monthly mortgage payments jumping up at the end of your fixed period, it’s worth looking at remortgage options well in advance.
10. Not using a broker
Some clients I speak to only consider the headline rate they see advertised. The lowest rate doesn’t always mean you get the best deal as many products have an arrangement fee attached to them. It’s therefore important to factor this into calculations, as well as the interest rate.
About the Author
Martyn Allen is a Maji mortgage advisor who also runs his own company, MA Financial. He is an independent, whole of market mortgage broker with over 15 years’ experience in the financial services sector. Whether you’re buying your first home, re-mortgaging, moving home or looking for an investment property, he provides personalised, professional and trustworthy mortgage & insurance advice.
Get in touch with Martyn at m.allen@martynallenfinancial.co.uk
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