Five Top Tips for Getting the Best Mortgage Deal

30-Jun-2009

Whether you're a first time buyer or you need to remortgage, finding a good deal can be tough in the current market. The applicants with the best credit ratings are getting the best offers, so follow these tips to help you qualify.

1.  If you're a first time buyer who has never borrowed money before you will need to create a credit history. Take out a small loan or a credit card and repay it in full and on time, every month.

2.  Be realistic about the amount you can borrow - don't ask for more than you can afford to repay. Most mortgage lenders require at least a 25-30 per cent deposit for their best deals these days, so it's better to wait and save up than take a deal you might have difficulty servicing later on - interest rates are likely go up in future.

3. Check your credit report before you apply - lenders use it initially when they decide whether to make you an offer, and, if the offer is successful, they use it to determine what interest they will charge you.  Therefore, it's important that you get a preview of what they'll see. Look for errors or misunderstandings and apply to have them corrected.  You can see your Experian report for free with a CreditExpert trial.

4. Past debt and missed repayments are part of your credit history and may put lenders off. Pay off as much as possible before making any new applications and, if there are extenuating circumstances that led to debt problems in the past, make sure that you explain this when you apply.

5.  Make sure you're no longer financially associated with former partners, as their credit history could affect your ability to borrow.  Close old joint bank accounts, and cancel joint credit cards or loans.