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We all want the lowest mortgage rate, however
just looking at the headline interest rate can often be very misleading.
Often the lowest rates are used to lure in borrowers, but taking
into account all the terms and charges are actually far from the
best deal.
For example, you’re looking to re-mortgage so are searching
the papers to find the best mortgage on the market. You spot a bargain
interest rate. What you don’t realise is that you will then
be tied in by extended early repayment charges to the mortgage provider’s
high standard variable rate for a further 3 years...
The key to finding a great low mortgage rate is to check the small
print. If you see a ridiculously low rate, then it’s likely
that there will be a catch. A reputable mortgage broker will be
able to check out the deal for you, or find you a better one. It
is possible to find a great rate with no catch.
Another thing for the mortgage finder to bear in mind is the type
of mortgage loan they would like to go for, as this can affect the
rate considerably. The lowest rate isn’t always the best.
If you are in a position to take a risk, then a variable rate such
as a tracker mortgage or discount mortgage may be
the best for you.
However, if you prefer the stability of your payments being the
same each month, then it may be worth your paying a little more
for a fixed rate.
A Flexible mortgage such as an Offset mortgage tends
to have a higher rate, but then for certain borrowers there can
be advantages including the ability to clear the loan quickly which
in the long run makes good financial sense.
So when searching for the best mortgage rate, don’t
just go for the lowest. Weigh it all up. And always seek advice!
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