How to Find the Cheapest Mortgage

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When we are looking for a mortgage, we might be on the hunt for the one that is the cheapest. We may wonder whether to start looking.

Establish What you Mean by Cheapest

You need to start by establishing what you mean by cheapest as different people could mean different things. You may mean that you want low repayments and this may not actually give you a cheap mortgage with regards to the costs charged on it over the time that you have it, as it could mean that you will have to make more repayments, the mortgage will last longer and you will have more interest charged on it. You may mean that you want a low interest rate, but you need to be aware that you may also need to pay fees which you will also need to allow for. If you mean the total cost of the loan, then you may need to check with the lender to find out exactly how much this will be although a mortgage calculator may help. You may mean the one that gives you the best value for money and therefore the one that is not necessarily the cheapest but that you feel will give you the most in return for what you are paying oy.

Compare Mortgages

Once you have established what you are actually looking for you will be in a position to compare the different mortgages on offer. Some people will head straight to a comparison website and these are useful but in a limited way. This is because they may only compare mortgages on their interest rates and so will not allow for other costs. If you are interested in value for money, then the cost is only one part of it. You will also find that these sites only have a small selection of lenders included and so you may find that there are others that are better suited to your needs. Lastly, these sites tend to make money from commission paid by the mortgage companies that they recommend and so they may recommend those that pay them the most.

If you want to find out about more mortgages then you may have to go to a search engine and just search for mortgage companies and then compare them.  This can take a lot of time and you will need to be very clear in your mind as to what you want from a mortgage so that you can find one that will suit you really well. It will take time to do this and you could find that you will run out of motivation part the way through.

There are other websites that you might be able to look at that might help. Ones the review mortgages or lenders can be quite useful to get some extra information to help you. It is a good idea to remember that these sites might be biased and they may also make commission on recommendations too. They can provide you with some useful information as well.

It can be a good idea to ask an independent financial advisor for help. You will have to pay them but it could be worth it as if they match you to a mortgage that suits you really well, you could end up very quickly saving enough money to easily cover what you paid for them. This will save you doing all of the research yourself and so will save a lot of time and even after working hard you may find that you do not come across the very best mortgage to suit your needs anyway.

How to Pay off a Mortgage Early

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Many people repay their mortgages early and it might be something that you like the idea of doing. It could save you money and reduce the time it takes you to repay which can be great. However, you may not know how to go about repaying it early and it is a good idea to find out.

Check Early Redemption Fees

The first step is to find out whether there is a fee form your lender for repaying early. This is often called an early redemption fee and is often more associated with fixed rate mortgages. However, check anyway as these could be quite significant and might mean that you cannot afford to repay early as they could be many thousands of pounds. Sometimes, they are just a few hundred pounds to cover the admin fees. Whatever the fee is, assuming there is one, you need to think about whether it will still be worth repaying early if you have to pay it. It can be worth trying to calculate how much money you will potentially save by repaying the mortgage early and see whether this would be more than the fee.

Consider Changing Lender/Mortgage

If you do decide to repay early, then it is worth considering whether it is a good idea to switch to a different lender or mortgage. You may need a more flexible mortgage to be able to make overpayments and it is good to discuss this with your lender. Find out whether you can do this with the mortgage you hold or whether they have any others that you can do it with. Also look at other lenders and see what they have on offer as you may find that you can get better value for money if you switch to a different lender. If you are tied in to your lender with a fixed rate, then you may have to wait until the fixed rate period is up before you can change.

Pay a Bit Extra off Each Month

It is a good idea to pay a little extra off each month. Consider how much you might be able to afford and just start doing it as soon as you can. Even small amounts can really add up and so do not worry if it is only an extra tenner a month, it will make a difference. You may find that you will be able to increase that amount as well by making some lifestyle changes. You might be able to compare prices and spend less on what you buy regularly and buy less luxury items and that will make more money available each month to overpay. You may also be able to find some ways to earn a bit more money too.

Drop in Lump Sum Repayments

As well as paying in more than you have to each month, it can be useful to put lump sum payments in when you have them. You will find that at times, you might discover you have a chunk of money in your account that you do not need to spend on anything and this will allow you to be able to pay in a lump sum. Even if it is quite small, it will help. It is worth bearing in mind that the interest on a mortgage is usually calculated daily and so as soon as you pay a bit off, even a small bit, you will be charged less interest. Then, due to the reduction in interest charged, you will have more money to put towards repaying the loan itself. The small payments will really start to pay off.