Ensuring you get the best possible mortgage rate goes beyond merely comparing rates here and there. While your credit score counts, it’s way beyond that as well. Finding the right mortgage rate is important because the mortgage rate could truly make a difference and help you save thousands of pounds over the life of a loan? What exactly are the factors you should think about if you’d like to get the best mortgage today?
Attractiveness of your credit score and lender flexibility
It is a given that a poor credit history is capable of ruining your chances of getting an awesome mortgage rate. It is true that mortgage lenders are generally tough when it comes to credit scores of borrowers, and they should be, but many lenders are flexible and may offer decent mortgage rates to borrowers without a solid history. This extent of their flexibility will largely depend on how serious the borrower’s issues are and how recent they are.
It is important that you keep tabs on your credit score by meticulously monitoring it and making adjustments where needed. Whether it’s by paying off or paying down loans, clearing up any errors you find, or paying up on past-due collection accounts, ensure you get your records straightened. If vin the end, your credit score still doesn’t look as great as you’d like it to be, look out for the more flexible lenders.
Additional costs
Anyone will be tempted to jump right at the lowest interest rate available but before you get too excited about finding a low rate, you should take a closer look at all additional fees. You’ll be surprised how they can significantly increase the total cost of the mortgage. Be sure to ask questions about all the fees you’ll be charged which may include underwriting or loan origination fees, closing costs, appraisal fees, and others. When making enquiries, ensure you don’t leave out potential charges such as prepayment penalties.
Another cost you might want to factor in is that of landlord insurance. It’s not a requirement for obtaining a mortgage loan but it’s a cost you’re likely to incur down the road, given the its advantages. AXA has a useful resource to provide all the information you might need on landlord insurance.
Negotiation
You might not have considered doing this but it is possible that you’ll be able to bargain for a better deal with a lender. Once an offer has been made, request that the lender outline all associated costs and find out if some fees can be reduced or waived and if you can get a lower interest rate.
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