‘Content correct at time of publishing and subject to change’
Finding the right mortgage can seem daunting at first when you see how many different types there are on the market, especially if you find yourself needing a bad credit mortgage. However, if you follow the correct steps you can easily find the best mortgage deals for you that will also save you 100’s of pounds each month. Learn how to navigate the mortgage process in our steps below and find the best deal for you.
Note: If you have been receiving financial support during Covid-19, you could encounter more scrutiny than usual and it could be harder for you to get your mortgage. Always seek advice if you’re unsure.
1. Quick search
Assuming you have done some initial research, you should know what type of mortgage you need. Whether you want to opt for a fixed, variable or discounted mortgage, it’s important to look for the rates you could get. Your rate will be determined by your deposit and the value of the property you’re looking to buy. Currently, a 10% deposit is the suggested minimum deposit you should aim for.
Myth: Your bank always has the best mortgage deals. - This is not necessarily true as your bank only has access to a very limited number of deals. However, you could use your bank as a starting point when looking for the right deal for you.
2. Seek advice from a mortgage broker
Now that you know the ideal type of mortgage and rate of interest for your circumstances, you should visit a qualified mortgage broker who will most likely try and beat the best mortgage deals you’ve found online or at your local bank. A mortgage broker can save you a lot of time and money as they scour the entire market and cover a large range of lenders in their searches.
Not only do mortgage brokers find you the best deal on the market, but they also ease the process of acceptance and add a layer of protection should anything go wrong. Your mortgage broker will also advise you on any government mortgage schemes, such as shared ownership or help-to-buy. At Twin Pine, we can support this as help to buy mortgage brokers.
Note: Mortgage brokers also know the market extremely well so they will be able to advise and predict whether a lender would lend to you or not, which ultimately saves you a lot of disappointment.
A great way to find the best mortgage deals for you is to ask your friends and family and see who is the right fit for you. You should always be aware that mortgage brokers often charge a fee for their services so take this into account when shopping around too.
3. Be wary of deals that brokers miss
Even though your mortgage broker will scour the entire market, it may be worth double-checking before officially choosing your mortgage. Your mortgage lasts for many years so it’s important that you make the right choice and cover all bases to find the best
mortgage deals available.
Some brokers have retreated from the broker market to save money so you should always confirm you’re getting the best mortgage on the market.
This also applies if you are planning to remortgage with bad credit as it may already be harder to get a good deal, so make sure you compare the remortgage deals available to get the best one for you.
4. Examine your mortgage paperwork
The one downside to mortgages is that you could fill a library with the amount of paperwork it entails. There are two main pieces of information you should check carefully.
Key facts Illustration
The name says it all. This document will give you all the key facts about your mortgage but it won’t illustrate all of them for you.
You should be given this prior to your application so you should be sure to fully examine this and look out for the key facts logo, the correct date, your name and who has created the document (should be your broker’s details).
If any of the information is missing, ask your lender for a new one with the correct details. This document is crucial should you encounter any disagreements with your lender. Your lender also won’t keep a copy forever, so make sure you keep your copy safe.
The mortgage offer
Once you’ve successfully applied for your mortgage, you will receive your mortgage offer from the lender. This document is arguably the most important document you will receive. Thus, you should check all the information and make sure everything is accurate.
Two essential things to look out for are, misspelt names or incorrect loan figures. These pieces of information could stop your mortgage from going through or cause delays so be sure to keep an eye out for these. In addition to this, you should look out for anything unexpected such as early repayment charges that your broker has not flagged up with you etc.
5. No hard sells
Although mortgage brokers are usually very beneficial, they may sometimes try to make more money, and rather than trying to find you the best mortgage deals possible, start to sell you additional products that you do not need. If you are looking for a first-time buyer bad credit mortgage, be aware that some mortgage brokers may take advantage or see you as an easy target. Below is a list of products to look out for.
Mortgage payment protection insurance
This is a policy that is supposed to cover your payments should you become ill or be made redundant. MPPI is not a bad policy but it can be very pricey and has been mis-sold quite a lot in the past. The reason misselling occurs is that the insurer only carries out checks once you go to make a claim, not when you take out the policy. Therefore, you could be paying for a product you cannot actually use further down the line.
Bundled buildings/contents insurance
Most lenders will insist that you take out building insurance and could be the condition of them lending you the mortgage. However, be wary of which deals you are recommended through your lender. You may find that a policy that’s been quoted with low monthly payments is ideal, but you could be trapped into paying extortionate premiums.
Certain lenders will also add an admin fee if you decline their insurance, but you can recover this from the insurance provider you settle with, so don’t feel pressured into taking their insurance due to fees.
6. Things are different if you are looking for buy to let
If you are looking for a buy-to-let mortgage with bad credit, it might be more difficult to get the finance in place. However, having a bad credit history doesn’t necessarily mean that you can’t find a Buy to Let mortgage lender who is willing to review your application.
At Twin Pine Mortgages, we have a Buy to Let expert who will guide you through the process if you are looking for a mortgage and have bad credit. This is true whether you've never been a landlord before or already have multiple properties in your investment portfolio.
How we can help you
Here at Twin Pine, we have over 40 years of experience, so get in touch today and we can help you find the best mortgage deals on the market. Additionally, if you need more information on mortgage brokers specifically, try reading our blog on ‘Everything you need to know about mortgage brokers’ here.