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If you're thinking of applying for a mortgage, you don't have to let the struggling economy deter you - especially when taking advantage of fixed rate deals that will protect you from inflation. The best deals may not always come your way though, which is where doing your research beforehand can really pay off.
There are many things you need to look for when comparing mortgages, to ensure you're getting the best deal available. The advantage of a fixed rate mortgage is that your monthly payments will remain fixed for a set time - whether it's two, five or ten years - but this could also prove to be a disadvantage if you aren't careful to establish a sufficiently low interest rate from the onset. There are also other costs to consider, such as lender and broker fees, and these need to be factored into your budget.
Improving your credit rating could help you greatly in securing lower interest rates, as your credit score gives lenders a fairly accurate view of your risk factor. There are many well-publicised ways to boost your credit score even in a relatively short period of time, such as opening a range of credit card accounts and other loans and ensuring you pay them off in full each month. It's never a good idea to lie about your credit rating though, as lenders are likely to check for themselves, and may refuse you a loan if you were found to be dishonest.
If you're capable of paying off a substantial part of your mortgage when you first apply, this can be a great way to beat inflation. Some lenders may allow you to pay off as much as 25 per cent of your mortgage in your initial deposit, but at the same time you shouldn't be too worried if your finances are currently struggling. However, you should be confident that you will be able to make your monthly payments when required, without it presenting a financial obstacle.
With continuing economic uncertainty, particularly in the housing sector, it's no surprise that fixed rate mortgages are proving increasing popular, and now account for more than 40 per cent of all new mortgages. It pays to shop around when looking for mortgage deals though - getting quotes from different mortgage companies is usually quick and straightforward, and your credit won't be harmed unless you are refused for loans.
The author of this article is a part of a digital blogging team who work with brands like Confused.com. The content contained in this article is for information purposes only and should not be used to make any financial decisions.
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