The banking system, especially the UK banking system, has changed dramatically in over a century, and even within the past decade, several major changes have been taking place that influence the way banks do business – and this includes deciding on whether or not to grant you a loan or a mortgage, and under which terms. And whilst you may not be able to march into a bank and get a perfect deal right away, the good news is that there are some things you can do to push the odds in your favour. Here are three simple steps to help you get that perfect mortgage deal:
Make a Great Impression
The number one decisive factor that the bank will examine is your balance sheet and income/expense statements. Naturally, it goes without saying that the higher your income, the better your odds. Similarly, the lower your expenses, the higher your chances.
Yet it’s not just about that. It’s very important that you have a great credit rating. Make sure you are in good standing regarding your credit cards and that there are no unpaid bills left. Banks like it when you go into debt – as long as you immediately pay those dues. The more trustworthy you seem, the greater your odds.
Consider the Terms
Mortgages are contracts whereby you give the property as collateral for a loan, and that loan will be paid, with equal payments, over a certain period of time. The mortgage will depend on the value of the property (to calculate loan-to-value), interest rates, and the length of the period.
The higher the interest rates, the more you’ll have to pay over time. Furthermore, the longer the payback period is, the more risk the bank agrees to take, so chances are, rates will be higher. If you would like to be sure, you can find simple calculators online. Use them, and draw up with several alternative proposals to the bank. Know what to expect so you are in a position to negotiate.
Use a Mortgage Broker
It’s wise to get as much information about mortgages from different banks and lending institutions in order to pick the one that can offer you the best deal. However, this can take a lot of time.
Mortgage brokers are in the know and can help you with the preparation of your application. Often, they don’t require fees upfront and take only commission once the deal has been made. They can often help speed up the process as well, and give you invaluable advice.
Due to higher restrictions and stiffer competition, banks have become stricter and are not always easy to persuade; often, they require hard proof and favourable terms. Prepare yourself and always look around for the best deals, such as the ones provided by www.seacco.co.uk.