The majority of providers offer UK fixed rate mortgages of up to a maximum of 95% of the value of the property, or its purchase price, whichever is lower.
Therefore you will need to save up a deposit of at least 5% of the price. 100% loans are available but you they are more expensive, in terms of the interest charged. Although you automatically pay more by borrowing the full amount, many providers charge you additional interest on 100% loans.
Another major cost to take into account is the mortgage indemnity guarantee (MIG) premium. This fee covers the provider for the added risk of advancing larger loans. It is usually activated when the loan is for more than 75% of the property's value and rises with the amount you borrow. On loans over 95% it is usually quite steep.
Before you fill out UK fixed rate mortgage applications, take whatever steps you can to improve your credit. Pay off old loans, and once they are paid off, ask your creditors to remove negative listings from your credit report. If you need new, positive credit listings, get a department store credit card, make a few charges on it, and pay them off speedily.
Before you get your UK fixed rate mortgage, consider the best bit of financial advice I've ever read. It was by Scott Adams, the author of the 'Dilbert' cartoons. I paraphrase it, from memory, like this: He said that you need to buy a roof over your head, get health insurance, save up enough money for a year off work, pay off outstanding debts, and secure your children's education.
After all that you can consider playing the stock market with what's left. Doing anything else mortgages your future.
TIP: Shop for insurance well before you are ready to sign off. If you wait until the last minute, you may have no time left to shop around for the best policy.
I get a lot of calls from people whose credit is bad, or who have CCJs (County Court Judgements) against their name. What can you do if this is the case?
Well, you can try to erase or ameliorate these black marks. First you check what a provider might find out about you, when they do a credit check. Go to Experian and Equifax. Order your credit report from BOTH sites, as there may be different entries in each.
Make sure you give the same name and address as you normally have on your bills. If you moved recently (in the past two years), give your old address as well. You're dealing with a bureaucracy, and big computerised databases. They can only find what you tell them; if you give incorrect information, you may not get the full picture.
You can also apply to the County Court to satisfy outstanding judgements against you and make sure your creditors change their entry in your credit report.
An interest-only deal requires that only the interest on the UK fixed rate mortgage is paid off on a regular monthly basis, the rest of the actual amount borrowed is then paid off via another method e.g. a pension, an endowment, or an ISA. This means that the monthly repayments do not actually pay back any of the initial loan.
The borrower must be sure to make regular payments to the other method (pension, endowment, or ISA) to ensure the complete payment of the capital by the end of the agreed period. There are also many different forms of interest rates associated with the various types of UK fixed rate mortgage deal offered.
Ask about UK Fixed Rate Mortgage today!