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How to get the Best Mortgage

There are lots of mortgages around and whether you are looking to find a mortgage for the first time, if you are moving house, remortaging or just wondering whether to swap mortgage providers, then you will be on the look out for the best mortgage.

The first thing to remember is that we all have different criteria when we are looking for a mortgage and so there is no best mortgage that will work for everyone. Therefore, you will need to start y thinking about what is important to you and then matching a mortgage to that.

Cost

The cost of the mortgage is the thing that most people will feel is the most important for them. They will feel that the cheapest will be the best as they will spend least money on it. Obviously, the cost is a really important factor and as you have a mortgage for so long, if the interest rate is a bit higher for the whole time, that could add to quite a significant increase in cost. However, it is important to remember that rates will change. Even if you get a fixed rate, it will not be for the full term of the mortgage and so you could find that the mortgage you choose will not always be the cheapest, even if it was when you took it out. Therefore, if you do want to make sure you always have the cheapest, you will need to keep comparing the cost and switching to the cheapest. This might be tricky in a fixed interest rate as you can be tied in and even if you are not, you may have to pay a fee if you want to switch to a different provider.

Value for money

Rather than the cost, some people would rather look at the value for money. This not only takes account of the cost but also what you get for that money. Some people will want to get good customer service, a flexible term, a lender they know and other things like that and will be prepared to pay a bit more in order to get it. It is wise to think about whether there is anything that you would like to get out of a mortgage provider as well as a low cost, so that you can bear that in mind when you are comparing the different providers and make sure that you get the best mortgage for your needs.

Lender reputation

For some people it is really important that they have a lender they can trust. This may mean that they want one they have used before, that comes recommended or that they have heard of. It is worth thinking about what you might want in a lender, whether these things might be important to you. You will be able to research lenders by looking at different things such as their website, reviews and money websites. You could also ask people that you know about their experiences as well.

Repayments

It is really important to also focus on the repayments. You will need to repay the mortgage and you will be repaying for a long time. You will need to think about what will suit you with regards to repayment. It is important to think about what you can afford as well as how long you would like to repay for. If you repay over a longer time period then you will have smaller repayments but you will be charged more for the mortgage. It can therefore be tempting to repay more each month over a shorter time period to keep things cheaper. However, it could make the repayments difficult so it is important to make sure that you are confident that you will be able to afford them. If you do miss a repayment then you will have extra charges to pay so it will work out more expensive than having smaller repayments for longer and paying the extra interest.

Once you have decided what you want in a mortgage you then need to look for it. Some people choose to pay an independent financial advisor to do this for them as it means that they will get an expert to decide for them. However, some people would rather make the decision for themselves or cannot afford to pay the advisor. Some would rather use comparison websites to look at the prices of mortgages but it is wise to use a selection of these as they may give different results and to be aware that they will not list all mortgage providers as some do not appear on comparison websites. Another option is to look at individual lenders websites but this may take some time and you may only be able to look at a few of them.

Is an Overdraft a Good Way to Borrow?

Many people will have an overdraft facility on their current account. This will allow them to spend more money than they have in the account and will therefore be a way to get a bit of extra money if it is needed. There are advantages to using an overdraft when you need to borrow money but there are also disadvantages as well. It is worth being aware of each and then you will be able to decide whether using an overdraft will be the right thing for you.

Advantages

An overdraft is a way of borrowing money quickly. Once you have got the agreement with your bank that you can borrow then you can use the overdraft whenever you need to. This is much quicker than organising a loan when you need the money and so it can help you out. If you need money in an emergency then this can be a really good way to get it very quickly.

You will only be offered a limited amount of money, although you will be able to borrow more than that. If you borrow more the charges will be higher. This is good because it will limit how much you spend and if you are careful you will not want to be charged the higher amount so you will hopefully use the overdraft really carefully. You can even ask your bank to reduce it if you wish and that will mean that you will have to be even more careful.

The overdraft will be repaid automatically when you put money into the account. This means that it is easy to repay and could potentially be repaid quickly. However, repayment is flexible and this means that you will be able to repay when it suits you. You will be able to borrow the money for as long as you wish and as long as no money is paid into the account it will just remain unpaid.

Disadvantages

Like all loans the overdraft will cost money. There will be charges every day that you are overdrawn. These can be pretty high and if you are overdrawn for more than you have agreed with the bank, and even if it is not for that much it could still add up to a lot of money. Overdrafts can be one of the more expensive ways to borrow and it is always wise to make sure that you are aware of how much it will cost you before you use it. You might be surprised at how expensive it is. Think about the cost and whether you are happy with paying that. It is best to consider whether the you would have been prepared to pay that much extra for the item that you are using the overdraft to pay for. If you would not have bought it at that price then do not buy it now.

It can be too easy to use an overdraft if you do not keep a close eye on what you are spending from your current account. You can easily keep on spending through the month and use the money that is available to you without thinking about it. Therefore, you need to make sure that you are very careful with what you are spending. Keep a check on your account balance and perhaps keep a buffer of money in there so if you accidently overspend you do not go overdrawn.

Is an overdraft a good idea?

So whether an overdraft is a good way to borrow will depend on you and your circumstances. If you need to borrow just a small amount and need it quickly then it can be ideal. However, it is wise to make sure that you are confident that you will be able to repay it quickly so that you do not have to pay too much for it. If you think that you will keep being tempted to use it for all sorts of treats then it may be a good idea to try not to as you will end spending a lot of money and paying a lot in interest as well. There may be cheaper ways to borrow money as well, so you could think about whether you might want to compare prices of different types of loans to see whether there are any others which might offer you better value for money. It is wise to think hard about using the overdraft and do not use it just because you can. If you do this then you will be able to also make sure that you are confident that you can repay it and that you can afford it as well. Giving it this much thought will mean that you can be confident that you have made a good decision with regards to whether you should use it or not.