So you’ve decided to buy a house. A loan comparison site can help you find the best deal on home loans but it's still quite a complicated business that requires a great deal of research and preparation.
We're going to have a look at the type of mortgages available to you as well as offer you some practical advice to help you prepare before making a mortgage application.
Apply for the right home loan
It’s one of, if not, the biggest investment you will ever make in your life. This is why it’s so important to make sure that if you’re going to take out a home loan, you don’t just jump in headfirst.
When we speak of a home loan, the first thing you need to know is that there is more than just one type of home loan. In fact, there are many types of home loans, each with their own pros and cons.
Gaining knowledge on the available home loan options and their respective pros and cons will place you at an advantage. You'll not only be able to compare the right type of loans when using a loan comparison site but also be able to distinguish the loans that are suitable from the ones that are not.
What are my home loan options?
Some of the different loan options available to you include fixed-rate, variable-rate, tracker, as well as discount home loans. But before you can even start thinking about the type of loan you want to apply for, you’ll first need to decide how you want to make your repayments – either as interest-only or interest and capital repayments.
This will make it easier for you to see which options you should be looking at. It can be a little overwhelming, so if you still need some help, you can always speak to an expert who can give you some sound advice.
Tailored home loan deals
This loan offers you the opportunity to choose what works best for you out of a variety of options. You can have the peace of mind in knowing that you are going to find a loan option that suits your needs precisely.
One thing that remains constant though is that a home loan is a secured loan, which means that the home you intend to purchase will serve as collateral for the loan until it has been fully repaid.
This is why it’s very important to make sure that you can afford your repayments because if you fail to keep up with them, you could lose your home, which is the last thing you want.
Lower rates & lower repayments
With a home loan, you can look forward to enjoying generally low-interest rates. This is because home loans tend to have lower rates than other personal loans, which is good news for you.
You can repay your loan in small installments over a 30 year period. The added incentive is that you will be paying towards something that will one day belong to you, making it a worthwhile investment.
Get things moving
Buying your new home is no cheap task. In fact, your home is probably the most expensive thing you’ll ever buy. Furthermore, in addition to the price of your home, there are other costs involved that you’ll need to take into account.
Overall, this amounts to a big sum of money that you’ll have to pay. A benefit of applying for a home loan is that it helps you cover these costs so that you can get into your home quicker.
Example of some additional costs include municipal and service fees, attorney fees, transfer and bond costs as well as levies and other sectional titles fees if you're buying into a sectional title scheme.
You may also want to consider the costs of repairs and upgrades which may end up costing you thousands of Pounds. These can be upgrades to bathrooms and the kitchen which are generally some of the most expensive or others such as roof repairs and painting.
Useful features for a first-time homebuyer
As a first-time buyer, the process of purchasing your home can be especially daunting. This is why you should make use of some features that are highly beneficial for people looking to buy a house for the first time.
One such feature is a high LTV (loan-to-value ratio). This is simply the amount that you are able to borrow in terms of a percentage in relation to the value of the property.
You should also make use of home loan calculators and use them to determine, more or less, how much you can afford in terms of monthly repayments. This will give you an idea of your ideal price range and will help you wen looking for properties.
Using a broker to find your perfect home loan
Brokers do not charge clients for their services and are invaluable when it comes to finding a mortgage to suit your every need.
Since brokers compile a single loan application and then distribute this among multiple mainstream lenders, you will be able to review multiple loan quotes and therefore will stand at a great advantage.
Brokers will make applying for a loan easier and will be able to explain your available options and review your financial situation and needs to advise you on which option will suit you best.
Once you receive quotes from multiple lenders they will help you review these as they have an indepth knowledge of what these quotes mean and which best suit your individual needs.
Start your home loan process now
With numerous online loan options on offer, you’ll have to know which one is best in assisting you to make this become a reality in the smoothest way possible.
This is an exciting time for you and the last thing you need is going with the wrong home loan option simply because you didn't take the time to do the research. So choose wisely by making use of the available resources online.