Published: 14/10/2017 By Mark Alefounder of Optimum Financial AdvisersI keep getting asked the same question so I thought I should share an article again that I originally published via Property Tribes.
So what is that Question?
It’s this one. “What is the BEST Mortgage currently available”?
It’s a bit like asking me, why do we press harder on the buttons of a remote control when we know the batteries are dead? Sometimes there isn’t a straightforward answer.
The simple fact is that BEST is different for everybody. My BEST is different to yours and yours to the person sitting next to you and so on.
BEST when it comes to a mortgage is a made to measure / bespoke solution, taking account of as many considerations as possible, to ensure that whatever is recommended fulfills as many if not all of those components you want it to include. That means looking at what you’ve done in the past, what you want to do now and what you want to do in the future.
OK, nobody can predict the future but everyone has goals, hopes and plans that they would like to achieve within certain time frames. Everyone expects to be here tomorrow so why not plan for it?
A popular but often misguided belief in mortgage terms is that BEST means cheapest.
Think about that for a moment.
In almost every other walk of life we approach the cheapest as being that of least quality and we firmly believe that the more we pay for something the better it’s going to be. True enough when it comes to borrowing money we want the interest we pay to be as low as possible but all too often we can become so fixated with the headline rates that we lose sight of all of the others costs, fees and charges or restrictive terms that sit conveniently hidden by that attractive rate.
You don’t have to pay more for a quality mortgage but neither is the cheaper of lesser quality.
So how do you find out the BEST rate available? Well you start by taking into account the overall cost and that includes all fees that are going to be charged by the lender. All too often the lowest interest rate on the market may still be a bad choice as large fees are involved.
What should be taken into account is the arrangement fee and possibly a “booking fee”. Valuation fee, any higher lending charge and of course any early repayment charges. Other fees may also apply, including mortgage account fees, conveyancing charges, remittance or CHAPS fees, and so on. Where a mortgage includes fees, it’s worth checking which need to be paid up front, as lenders may allow some fees to be added to the mortgage and repaid over time. All this needs to be taken into account.
So when it comes to the BEST all you need to do is base your decision on Overall Cost?
Some lenders will process mortgage applications far quicker than others, and if you are in a race to complete a purchase it may be advantageous to settle for a slightly higher rate to ensure you get the property.
In short, finding the BEST mortgage deal takes time and effort.
Use our knowledge and experience to quickly find mortgages that suit your individual circumstances, and we can give you impartial advice on the pros and cons of each deal.