The Key To Getting A Low Interest Rate Mortgage In The Uk
Everybody hates the idea of paying too much on their mortgages. With the amount of competition between banks, it should not be too difficult for you to find a good deal. This will ensure that more money stays in your pocket and less goes in interest to your lender.
But there have been some changes in the sector recently. With the so-called 'credit-crunch' there has been less money available to lenders and they have responded by withdrawing some of their most attractive products. So is it still possible to get good low interest rate mortgages in the UK? Yes it is, but you will need to present yourself to the lenders in the best possible light to get the best deals. Here's how you can do it.
One of the first things that lenders will look at is the 'loan to value' or the percentage of the value of the property that you want to borrow. Up until early 2008 it was still possible to get a 100% mortgage. These have now all been withdrawn. Lenders are looking for people that have saved up a deposit of 5% and preferably 10%. If you haven't got this in savings you can approach your parents and many lenders will allow this type of arrangement.
The same goes for remortgaging. Lenders now want to see a greater proportion of equity in the property. If you are trying to remortgage to raise capital, this could mean that the amount you are able to raise is reduced. Many lenders are also making moves to reward those with higher amounts of equity. If you can afford a remortgage with 25% equity, you are likely to better deals that were previously unavailable.
In short, the best mortgage deals are going to those with a larger deposit or equity. The effect of the credit crunch means lenders are tightening their lending criteria. If you are a borrower you need to adapt to this fast changing environment.
