When you are buying home for the first time, or if you already have a mortgage and are considering changing mortgages, it can be important to pick the right mortgage. This can be a daunting task because there are a lot of different mortgage providers. However, if you are clear about what you are looking for in a mortgage providers then that should help you to be able to more easily find one.

Cost

It is a good idea to start by working out the cost of particular lenders. Some people might just compare the interest rates, but it can be a good idea to actually think about the full cost. This is because they may be some other fees as well, such as set up fees or admin charges that you will have to pay. Add it all up and then you will be able to do a proper comparison between the different lenders and see which will be the most expensive and which will be the cheapest. It will take a bit of an effort, but it is worth it and you will also be aware of the fees, which could be a lot higher or lower than you expect.

It will take a lot of time to work out the full cost of every single lender. Therefore, it is best to start by looking at interest rates, just like you would with regular borrowing and then look at the ones with the lowest interest rates to see what their fees are as well. Alternatively, you could ask them to let you know what their AER is. This is a percentage rate which includes costs as well as interest (Annual Equivalent Rate).

Repayment Amount

It is also a really good idea to find out how much you will be expected to repay each month. You will need to think about what you can afford and whether the mortgage repayment will be an amount that you will be able to cope with. It is really important to do this as you could get in serious problems if you start finding that the mortgage payments are too expensive for you. Therefore, you not only need to check and make sure that you can afford them now, but also think about whether you will still be able to afford them if the interest rates go up. If you have a fixed rate mortgage this will not happen until the fixed rate term ends, but if you have a variable rate mortgage, then it is possible that the rate might go up and then your repayments will be higher as a result. You will need to be sure that this will be something that you can afford.

Term

The term means that amount of time that the mortgage lasts. Mortgages tend to be 25 years but they can vary depending on how much you borrow and who you borrow through. Consider how long you want to be repaying for and whether the lenders you have in mind offer that. It is also good to think about whether you want to be able to repay early if possible. Some mortgages are flexible and will allow you to do this and others will not be. So, consider that as well.

Reputation of Lender

Many people also think about the lender themselves when they are choosing. They want one that they can truest. They might want to use one they have used before, one that their friends and family recommend, one that has good reviews, one that has a local branch or offers online banking and one that they have heard of. There are a lot of possibilities with regards to what you might want to think about with regards to a lender and some will be more important for you than others. It is good to have a think about what you want and then you will be able to match that up with what you can find.

This research will take some time but it is well worth it. When you take out a mortgage you are making a big commitment and because you borrowing such a lot of money, it can make a big difference if the interest rate is a little higher or the fees are a bit more. Also, because you are borrowing for such a long time, you also want to make sure you feel that the lender will be supportive and helpful all of the time. Of course, you will be able to switch lenders, but some will tie you in for a certain time period or have a fee for switching and the one switch too may also have a fee, so although it could save you a lot of money if you do switch, it is good to get it right first time if you can and only switch a few times if you need to.

Every one that own a home will probably have home insurance. If you have a mortgage then the lender will require that you have it and if you own it outright then you will probably want it. The home insurance will cover you for rebuilding the house if it falls down due to subsidence or floods, if it is damaged in fire or it has any other type of damage to some or all of it. What you are covered for specifically will depend on the type of cover you have. However, whatever you have, it will cost money. You may feel that it is quite expensive and wish that you could pay less. There may be a way that you can!

Switch Providers

It can be a good idea to compare the prices of different providers to see whether you are paying more than necessary. If you use a comparison website you will be able to get an idea as to whether you are paying more than necessary or not. You will probably find that there are insurers that will be cheaper. It is an idea to not switch immediately though. This is because you will find that there are lots of different comparison websites and they will list different insurers so you may be able to find an even cheaper one. There are also companies that only deal directly with customers and will not go through these websites anyway. These tend to have the word ‘direct’ in their company name so you may want to get a quote from them as well. Alternatively, you may want to go through a broker who will search through different insurers, but again they may not look at all of them. It is worth being aware that comparison websites and brokers get paid commission by the insurers that they recommend. This means that they may be likely to recommend insurers that they get paid well from and this means that you might not get the best possible price using them. However, it is much more convenient than getting lots of quotes from different insurers so you may decide that it is worth it anyway. Do make sure that the cover you get with the cheaper insurer is equivalent to what you have already as it could be cheaper because it does not provide you with so much cover.

Negotiate

It can be well worth negotiating. This is particularly worth it if you want to stick with your current insurer but have found cheaper prices elsewhere. Talk to them about the fact that they are more expensive and see what they say about it. They might be happy to reduce their premiums to keep you as a customer. Some will do this without any quibble at all as they have a budget available to do it to try to hold on to customers. It does seem unfair, but customers who ask for a discount will very often get one but those that do not will just not have one and have no idea that they are paying more than necessary. So, make sure that you contact the insurer and get any discount that you are entitled to. It is not a very British thing to do but we need to do it if we want the chance of paying less for our insurance.

Raise Excess

On insurance policies we will always pay an excess when we make a claim. This is an amount of money that we have to put towards the claim. This stops people making really small claims which are not cost effective for the insurer. So often this will be £100 so if you claim for something worth £250, you will only get £150 paid and you will be expected to pay the £100 towards whatever it is. If you raise this excess amount, then it is likely that your premium will reduce. This is because the chances of you making a claim will go down as you will not be able to make claims for lower value items. You will need to think about what you will be able to afford to pay and also whether you would bother to make claims for smaller value things.

Do not Claim

If you do make a claim, then you will find that you premiums will start to go up. This is because the insurer will see you as more of a risk and therefore charge you more as a result. This is something that you will need to think about, particularly when you are making smaller claims. Consider whether you can afford to pay for it without having to make a claim so that you can save money in the future.