Navigating the Mortgage Maze

By whatever measure you care to apply, it can’t be denied that house buying in 2010 is a whole different ballgame to buying one previously!

One of the foremost factors affecting the housing market is the reduction in the number of properties for sale. The real situation is, the total number of available properties has been reduced by more than 23,000. And not only are massive multiples of joint incomes no longer available, the quantity of lenders prepared to extend more than 90% of property value has also plunged. Little wonder then that if you have a poor credit history finding a mortgage is not an easy task.

Not everybody paints such a gloomy picture, however; David Hollingworth of mortgage broker, London & Country, believes that “although the market has changed substantially since the onset of the credit crunch, it is still possible to get a mortgage, and there remain thousands of deals out there.”

He advises:

1) Put down the highest amount you can afford as a deposit because the keenest rates are only available to those with a deposit more than 25%.

2) Deposits are even important if you are remortgaging. Hollingsworth explains that, because of the fall in house prices, you may have fallen into a different loan-to-value (LTV) band. He counsels you to use any savings you may have to reduce the loan-to-value and hence get a keener mortgage rate. Keep in mind that money put down as part of your deposit is no longer available for other needs, so leave yourself a buffer in case of short term emergencies.

3) As already noted, people with a poor credit history will not find it easy to get a competitive deal. Find out what is on your credit file through agencies, such as Experian, Equifax, or Callcredit Check and make certain that there is nothing unexpected or untoward on your record. It is also important to register to vote – not being on the electoral role will damage your credit rating.

4) Consult a Mortgage Broker and make sure he or she is registered with the Financial Services Authority.

5) If you don’t like nasty surprises, go for a fixed rate mortgage. And with interest rates at their lowest ever, that has to be a good bet.

Mark Jenkins is a writer for Visit us for more guidance on finding best remortgage deals, house repossession and quick property sales.