How-to Guides - Credence

Finding the RIGHT mortgage for you

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“We're happy to say we can call Credence Mortgages our “Finance” partners.”
Mark and Rhian Bridgens, (Swansea)

What to think about when looking for a mortgage

A mortgage is more than just a means to buy a home or an investment property. Approached in the right way, your first and each subsequent mortgage on your home can be the basis of a happy and prosperous financial future.

Be clear what you want to achieve in the long run

You must look at the bigger picture with regard to your future goals for savings, investments or wealth creation. Some things to consider in your planning are:

Am I going to need more money for home improvements?
Am I going to be moving again in the fairly near future?
Will I need a bigger or smaller house?
Is my income likely to increase?
Am I likely to want to repay the loan early?
Do I want to sell quickly to make a profit?

First-time buyers and those wanting to move to a more expensive home will usually be most interested in 'how can I get this house?' But taking time to think where you want to be in three, five or ten years will help to avoid financial penalties if your circumstances change.

Where are you now?

Whenever you borrow money, a prospective lender will always want to know your current financial situation and whether you can afford the new loan. So knowing your current income and expenditure accurately is the most suitable place to start.

Once you have this information to hand, you're ready to start looking for the right mortgage for you!

Where do I start?

With well over 100 mortgage lenders and over 30,000 mortgage products on the market, it's a daunting task even for the most sophisticated borrower.

The first step is to learn a little bit about the different types of mortgage products, their benefits and the issues involved. This is where our advice proves invaluable. For instance, we will tell you that if you plan to move again in a couple of years, then a mortgage with a fixed rate for five years and a penalty for early settlement is definitely going to be wrong for you.

How to find out what you need to know

You need to know the market to decide which will be the most suitable route for your circumstances. But where do you find the most suitable advice?

There are three ways to find the information:

Study the market yourself: This could take you a very long time, involve a lot of work, and in the meantime you could lose the house you want. It also assumes you have the knowledge to understand all the options on offer.
Approach your bank or building society: They will usually be helpful and explain everything they can. And some of them have excellent products. However, they can only tell you about their own products.
Use an FSA Authorised and qualified mortgage broker: If they are FSA authorised, they will be able to provide you with comparisons from the whole marketplace. Credence Mortgages always research the whole of the market and all of our advisers are fully CEMAP qualified,so you're in safe hands with us.

Planning makes a difference

Ask your adviser to itemise and explain all the costs involved in the purchase - legal fees, valuation fees, stamp duty etc. Note that some of these may be non-refundable, even if the sale falls through.

Don't forget that protecting your home against loss of life, serious illness or accident is important and you need to build these costs into your monthly budget.

The lender will also want you to safeguard them against damage to the property and will insist you take out buildings insurance. Again, this needs to be built into your budget.

For a quick guide to some of the costs involved, click here >>.

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