Rookie Mistakes You Must Avoid When Getting a Mortgage

October 29, 2014

Mortgage

Getting a mortgage is never a decision that should be taken lately. Yet, you’d be surprised how many people jump straight in, without really fully understanding what they’re getting themselves into. Many people don’t like to talk, or even think about money, which is understandable. But it’s also one of the quickest ways of landing yourself in a financial mess. So to help ensure you don’t become another bankruptcy statistic, we’re going to share a little insider info. The following are some of the most common (and costly!) mistakes that people make one taking out a mortgage.

Getting a mortgage

Courtesy of Karen Bryan

– Firstly, it’s essential that you don’t just opt for the mortgage that has the cheapest rate, because depending on what kind of mortgage you opt for, rates do tend to go up. If you’re a first-time buyer, a fixed-rate loan is probably your best bet. This means that you won’t end up paying more if the housing market were to fluctuate or interest rates were to rise. Whilst this does mean that you won’t benefit if rates decrease, you have the security of knowing exactly what you’re paying out each and every month. So, if you’re new to budgeting, this is probably the type of mortgage that would be best suited to you.

– The second most common mistake that people make is by overstretching themselves by getting too big a mortgage. But also not factoring in the additional costs of homeownership. If you’ve never owned a house before, the list of expenses that you simply don’t consider is huge. There’s council tax, home insurance, repairs, energy bills, and maintenance, to name but a few.

The most important thing at this stage is to get that first step on the property ladder. So, if you’re dreaming of a huge house with an Olympic size swimming pool, and you can afford it, then great! But if not, then put the dream on hold for a few years and get yourself a mortgage that you can manage. The key is to be realistic and practical at all times.

– Lastly if, for example, you’ve found a detached property in Newquay that you love, don’t let your heart overrule your head. All the excitement of starting a new life in your own home can cause people to make hasty decisions. What you must do before even contemplating putting in an offer is research the location, as well as the property itself. Visit the area on weekends and weekdays and at different times of the day. This gives you a chance to see what the parking is like, how noisy it is, and any other problems that could be a potential deal-breaker. Remember, once you’ve signed on the dotted line, there’s no going back. So take as much time as you need to do all the necessary research to ensure you take a mortgage out on the property that’s right for you.

Remember, mortgages don’t have to be scary. As long as you do all the necessary research, ask the right questions, and go in with your eyes open, there’s no reason why you can’t become another happy homeowner..