The mortgage process can be a minefield and extremely confusing to anybody who has little knowledge within the sector. In order to help you achieve a better understanding of mortgages and how they work the top ten mortgage tips list has been constructed. Whether you are looking for a better financial package, renewing your mortgage or just about to start on the property ladder then this advice could help you.

Reduce the term of your mortgage - Many people are fearful of locking themselves into a financial commitment of 25 – 30 years, of which a typical mortgage can be. There are ways that you can reduce this term over the course of paying your mortgage and pay off the balance early. It is possible to offset some of your other finances against your mortgage, this can include your savings, current account and ISAs, by doing this you can reduce the amount you payback and in turn this will reduce your mortgage interest rates. In reality what you are doing is overpaying your mortgage every month; this is usually known as an offset mortgage.

What to do when your mortgage expires – It is most likely that your mortgage has been arranged to last for 25 years, however you will not be locked in and will be able to move between providers during this period. It pays to look around for better deals because the mortgage rates will change during the duration of the mortgage. Many people benefit greatly from switching from their initial mortgage to a more flexible option or one with a better rate of interest.

Improve Your Insurance Payments – When you initially setup insurance on either your property or indeed your life insurance it may have been right at the time. Over the years lots can change and it is essential that you shop around for better deals; new customers for any type of insurance will always have incentives to sign up and switch to different companies. Never get complacent and stick with the same provider, it may seem like a hassle but changing can save you a lot of money.

Review Your Buildings Insurance – Buildings insurance is an essential and all reputable mortgage providers will insist that at the very least you have this cover. The purpose of the cover is for when you own your property, and paying the premiums is a must should there be any issues with flooding, fire or an unforeseen event. Building insurance premiums can rise and especially so if you stay with existing providers too long, it pays to shop around and change your provider fairly often. It is important though that you are aware of the full details of the potential policy that you want to take out and always look around to find the best deal that will suite you.

Check Out The Mortgage Fees – Before you agree to a mortgage always be aware of any fees that may be applicable, these can vary between different financial institutions. A mortgage is an expensive business and often what can be considered a very good deal will become less so once all the fees have been added on. Some of the most common fess associated can include lender arrangement fees, indemnity premiums, broker fees, application fees, valuation and solicitors fees. Always get these clarified before you sign into any agreements so that you do not have any unwelcome costs that you were not aware of.

Check Exit Fees – When ending a mortgage agreement or switching to a new supplier the lender will normally include a exit fee. Exit fees may often not be known by this name and can often be; redemption charges, sealing fees or deeds release fees. Which ever guise they come in the charges are not usually fixed upon signing the initial agreement and will often rise during the course of the mortgage above the rate of inflation. Before signing the mortgage agreement be clear on the charge associated with the exit fees and carefully consider if the benefits for switching still apply after this has been taken into consideration.

Mortgage Payment Protection – This is a payment that is made on a monthly basis to cover any mortgage payments during times when an unexpected event may cause you not to be able to pay. The most common causes of this will be unemployment, sickness, accident or disability. The majority of these insurance policies will not cover you for the whole duration of the remainder of your mortgage and will only usually payout for one to two years. When taking out the cover you can pay more depending on certain conditions such as your age, health or whether you smoke.

Stamp Duty – A government tax that is payable when you buy property or shares, this can be applicable when you are buying a property depending on the value. If you are buying a property that is less than £125.000 then you will not be eligible to pay, however the greater the value of the property then the more you will pay. For example if you were too purchase a property with a value of £325.000 then you would pay 3% of the property value in stamp duty, this is something that should be taken into consideration when you are looking at your mortgage costs and fees.

Buy-to-Let Mortgages – The buy to let property market is vastly more complex than the usual property market and there are considerably more issues to address. When arranging a buy to let mortgage some of the considerations that need to be taken into account include Income tax, Capital Gains Tax and Buy to Let Mortgage legal requirements. The government have been clamping down on landlords of residential property in recent months to reclaim millions of pounds in unpaid taxes.

Mortgage Calculators – When preparing your finances make life a little easier for yourself and use a mortgage calculator so you get an accurate assessment. It is important to take into account all aspects of your finances when calculating how much you can afford to pay each month. A mortgage calculator will give you a better and more accurate idea of exactly how much you may be able to borrow against your income and expenditure. Some of the required information to provide a really accurate figure will include personal financial information and mortgage specific details such as the mortgage rate and term.
 

A mortgage calculator will enable you to calculate your monthly mortgage payments. The mortgage calculator is simple and easy to use.