A mortgage is the biggest debt you’re ever likely to take
on, so do your homework and shop around, as you would for you weekly shopping! We are always surprised that someone will
announce to the world that they saved £30 off the price of, say, a fridge or
cooker, yet fail to apply the same research into their mortgage! The number
of mortgages available is rising on a daily basis and rates are incredibly
competitive. But even whilst shopping
around for a new mortgage, be wary that many ‘institutions’ are likely to carry
out a credit search on you. Make sure
you stipulate at the outset of any mortgage conversation that you do not
authorise any credit searches, until you agree you are happy to proceed with a
specific product or lender. Too many
credit searches in a short amount of time could be detrimental to your credit
score. If you have not reviewed your
credit search before, get it for free (30day trial period) from Credit Expert
(see www.atomltd.co.uk for a link). It’s well worth a review and a good insight
on how attractive you may, or may not, look to a lender.
In addition to a large increase in First Time Buyer
enquiries recently, we have also seen a vast increase in customers looking to
consolidate debt or even look at debt management plans. Both can sometimes cause issues. If you
consolidate unsecured credit in to your mortgage, although your monthly
payments may be lower, you may be paying more for your debt over a longer term.
With debt management plans (DMP), or Individual Voluntary
Arrangements(IVA), again, the lower monthly payments may help in the short
term, but you may well find it hard to gain an approval from a lender to
refinance at a later date. Lenders tend
to shy away from DMPs and may not assist anyone who has been in an IVA unless
it has been discharged, normally, for more than three to four years. Advice should always be sort before entering
in to these types of arrangements.
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