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What To Do Before You Compare Mortgage Rates

Jul 24, 2008
With the current fear of the house price crash, it is no wonder that people, couples, families and professionals are desperately seeking to sell their property in a bid to recoup some money. This may seem like a gloomy time for many struggling and hard working individuals, especially for those who have purchased their own house in hopes of making money from their investments. With the economy moving in the direction that it is, what could potential mortgage seekers do to qualify for a mortgage?

Before one even thinks about beginning to research and compare mortgage rates, they will need to watch the property market closely. See where it is going currently, what are the predictions and how likely are they going to receive the desired mortgage amount? Many people have made the mistake in applying mortgages six to ten times their current salary income. This has caused many homes to be repossessed, as they are just simply unable to keep up with the mortgage repayments.

Many families have claimed that they are just managing to 'get by' on their income, however, many have claimed that money is very tight - the number of families making the same claims have risen o an alarming rate further revealing how expensive mortgage rates can be. The only way to avoid such a dilemma is to initiate a plan over your budgets, decide how much you are able to afford from a mortgage and always do this after calculating your current monthly expenditure.

Always make a list of all of your outgoings, how much you receive on a monthly basis and what you are left after all of your outgoings. When you start to compare mortgage rates, you will notice that some banks have increased the interest rates in light of the current economic instability. This can be a discouraging outlook especially for people who are unable to save enough for a deposit. Many who have taken a full one hundred percent mortgage have faced paying more than what they had bargained for in terms of paying back the interest rate.

However, there is light at the end of the tunnel. First-time buyers will be rest assured that some lenders have dropped their mortgage interest rates enough to allow those unable to afford the high interests to apply. The mistake that some first-time buyers are making is waiting for the rates to go down further. This does not guarantee the rates to go down, as the way things are moving it will creep up again. Therefore the best time to apply for a low mortgage rate is now - when the mortgage rates have lowered and not later!

Always be doubly sure that you can afford the mortgage, the best possible way to do this is to go in with someone else, so you can share the mortgage payments evenly and afford the rest of the top-ups needed for maintaining and financing your home. If you going it alone, you could try to rent out the spare rooms for that extra bit of help. You should always make sure that you have enough left over for yourself; there is nothing worse than not being able to afford food let alone a social life. This will need to be completed as a checklist prior to signing on to a new mortgage. This way you know what are getting yourself into and making sure, you stay in control of your finances.
About the Author
Anna Stenning is an expert on how to compare mortgage rates, having researched the property market.
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