Last Updated on June 23, 2022 by Melissa S.
If you’re thinking about moving home soon, there will be a number of expenses that you need to consider.
There are removal costs for starters but before moving day arrives, you also have to factor in the estate agent fees and the legal fees that are attached to your conveyancing solicitors.
The biggest cost of all will be your mortgage as your finances will be hit by the monthly repayments you need to make on your loan. These repayments can sometimes be quite hefty although it is possible to reduce the cost of your mortgage by acquiring a deal with the lowest interest rates.
But how can you access the cheapest mortgage rates? Here are some tips that should be useful to you.
#1: Improve your credit score
When assessing your mortgage application, lenders will consider how much of a risk you pose as a borrower. One of the ways they assess this is by looking at your credit score. If your score is low, they might consider you a greater risk, and as such, they might charge you a higher rate of interest. But if your score is medium to high, they will have more trust in you as a borrower. As such, you could be eligible for the best mortgage rates on the market.
You can improve your credit score by paying your bills on time and limiting the number of loans you apply for. Check out this guide at Experian for other things you can do to boost your credit rating.
#2: Pay a larger mortgage deposit
The larger your deposit the better as the lender will consider you less of a credit risk. You won’t need to borrow as much money either. For both of these reasons, you might be entitled to a mortgage loan with the lowest interest rate so your monthly repayments will be cheaper.
Generally speaking, the best rates go to those who can put down 40% of the home’s value as a deposit. If you can’t stretch to this, aim for 20-25% as you might still be eligible for a cheaper mortgage. Any less than this and the interest rate will go up, so this is something to consider when you’re saving up for your mortgage deposit.
If you think you might have difficulty saving a large amount of money, you might want to ask trusted family members to help you. Alternatively, you might be eligible for one of the Help-To-Buy schemes if you’re a first-time buyer and this could be the gateway toward a cheaper mortgage.
#3: Speak to a mortgage broker
A mortgage broker’s job is to help you get the best mortgage for your situation. As they usually have access to most lenders on the market, including those that can’t be found on the high street, they also have knowledge about the best deals available. As such, it’s wise to book an appointment with a broker if you don’t feel able to find the cheapest deals alone. To make life financially easier for yourself, you should choose a fee-free mortgage broker to avoid any extra charges.
These are just some of the things you can do to gain access to the cheapest mortgage rates. Keep them in mind if you’re planning on buying a house soon.