3 Mortgage Facts That Might Surprise You
When you’re ready to get a mortgage, you might assume that you already have a good idea of what it will entail and what everything means. After all, a mortgage is simply a big loan taken out to buy a property, and the loan has a repayment period and an interest rate just like any other loan. What more do you need to know?
The truth is that this ‘big loan’ is a little more complex than this, and there are plenty of things you need to consider before opting to have a mortgage. Knowing as much as you can about this particular debt, probably the biggest you’ll ever have, is crucial if you’re going to make the right choice as to exactly which mortgage you choose. Read on to find out more.
You Can Get Mortgage Protection
If the idea of taking on so much debt is a worry, even though you would dearly love to own your own home, then you might be putting off taking out the mortgage or even applying for one. The problem is, house prices move quickly, and mortgage offers don’t stay around forever. If you’ve seen a property you can afford and you have found a mortgage deal that works for you, waiting could be a mistake.
Although we’re not saying you should rush into a decision like this, equally, if the issue is the worry of what might happen if you couldn’t pay, then this is not something that should stop you because of the existence of mortgage protection. This will cover your payments in the short term if you can’t cover them yourself. There are many different ways to get this cover; start by looking at Family First Life reviews and comparing this cover with others to ensure you are getting the right level for your needs.
Interest Rates Go Up And Down
They say that what goes up must come down, and this old saying can easily be applied to mortgage interest rates. When they are low, they are sure to rise, and when they are high, they are sure to fall.
Because of this, it’s not always best to opt for the lowest interest rate on offer because it won’t always be so low and might rise quite dramatically after the initial fixed-rate period. Instead, make sure that you don’t just look at the interest rate now, but what it will rise to in a year, two years, or maybe five years. This is just as important, and perhaps even more so; you need to know you’ll be able to afford the mortgage later down the line.
You Need A Credit Score
Having a good credit score is the best thing when you apply for a mortgage. You’ll get good interest rates, and more lenders will be willing to say yes to you. However, just because you have a bad credit score that doesn’t mean that a mortgage is beyond you. Some lenders will still approve you, although your down payment may need to be higher, and your interest rate might not be so great (although, as we’ve said, this isn’t necessarily a problem long-term).
The real problem comes when you have no credit score at all. Lenders are highly unlikely to agree to let you have a mortgage if you have no history of taking on debt and managing it well.