May 20 2013 Latest news:
Adam Aiken, Editor
Friday, December 24, 2010
...but don’t give up.
Mortgages have been in the news more than any other financial product over the past few years.
Bad mortgages were at the root of the US financial meltdown in 2008. Today, the ripples are still being felt on this side of the Atlantic, with scare stories that growing numbers of people will never be able to get on to the housing ladder.
It’s true that credit is harder to come by than it was a couple of years ago, but there are some basic tricks that could help you get the home loan you want.
The first thing to do is to make sure your credit history is healthy. Most importantly, meet the repayment deadlines on any credit cards or loans you might have; ensure you are on the electoral role; check your credit files to make sure they don’t have false information about you; and cancel any cards you don’t use – mortgage lenders will include all your credit lines, whether you use them or not, when they analyse your financial position.
Another thing to do is to look past the headline-grabbing offers. Saving on the legal fees or arrangement fees might sound a sensible thing to do, but the interest rate you’ll be paying is usually far more important.
Meanwhile, most of the best rates are available only to people who have significant deposits. (Check out the current best rates at www.mymoney24.co.uk/best-buys.) But there are some innovative deals out there, such as the Lend a Hand scheme from Lloyds TSB. This allows new a borrower to access a better rate if a family member has savings of up to 20pc of the property’s value.
This sort of scheme won’t help everyone, but it is a good example of how things might not be as bleak as they first appear.