Hints and tips for mortgage hunters

All signs point to gradual recovery from the global recession, particularly in real estate markets. Word is that in Canada, August housing starts rise more than expected. In the US, 30-year mortgage rates slide down to 5.04% average and are close to the record lows reached in the spring.

Unless you have a giant pile of ready cash burning a house-sized hole in your pocket, if you want to buy a property, you will most likely need a mortgage. But how can you decide which mortgage is right for you? Let this list of hints and tips show you the way.

Don’t just take the first mortgage that you are offered. While it might be flattering that someone has judged you credit-worthy enough to lend you a staggeringly large amount of money, the chances are that if one company has offered you a mortgage, others will too. As with any financial product, there are good deals and bad deals to be had, but without doing your research, you’ll never know which is which. However, if every other mortgage lender turns you down flat, then you should maybe reconsider that first offer. Either that or carry on renting.

Compare mortgages from rival firms. All mortgages are different, and it can really help to compare the various aspects of each one with the others in order to find out which one is really the best deal for you. Some mortgages might seem like amazing deals until you stack them up against offerings from rival firms.

Shop around. It goes without saying that lenders are keen for your business, so if you’ve been offered a mortgage from one firm, and you’re talking to one of their rivals, be sure to mention what you have already been offered. This can often lead to them coming back to you with an even better deal.

Look ahead. Nobody can really tell what the future holds, but most people have plans and expectations, realistic or otherwise. When buying a mortgage, it is a good idea to have one eye on the future, as you will still be paying for it in the years to come. While fixed rate mortgages offer a little more security, they tend to be a bit more expensive as well. For example, in the UK you can get a tracker mortgage from Alliance and Leicester which gives you an interest rate of 4.8%, whereas their 5 year fixed rate mortgages has a rate of around 5.4%. Visit the Alliance & Leicester website for more information on mortgages.

One final tip is to always check to see how easy a mortgage is to get out of before you get into it. For example, mortgages that feature very low rates often come with heavy restrictions to prevent you from switching supplier or paying it off early, which might not be all that convenient for you ten or twenty years down the line.