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Mortgage guide

Choosing a mortgage

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You should try to sort out a mortgage quite early on in the process of buying a home. This is because it can take a few weeks to process, and it is important for the person selling the property you want to buy to know you have a mortgage set up. It can make all the difference for a seller in deciding which offer to accept.

Many building societies and banks will let you know that they are willing to offer you a mortgage up to a certain level as you start looking. The details are finalised once you have decided which house you want to buy. However, it is still possible to sort it all out once your offer has been accepted.

The amount you can borrow is based on your income (and that of your husband/wife, boyfriend/girlfriend or just friend depending on whether you are buying with others), your status, the equity in your property and the affordability of the proposed monthly repayments within your overall budget, both now and in the future.

There are basically two ways to find a mortgage. One is to approach mortgage lenders directly and research what they have on offer, the other is to go through a broker, who can search a large database of lenders to find you a suitable deal. You can do this either personally, on the phone or via the internet.

Some people are more comfortable getting a mortgage from a high street name, and some people find it convenient to have their mortgage with the same bank they have their other financial dealings with. On the other hand, going through a broker ensures you get the best possible choice of mortgage products.

There are thousands of mortgage products to choose from, and the market can get very confusing. On Tiscali we can help you with research - with a comparision of more than 8,500 mortgages plus our financial team can give you mortgage advice and help find the right mortgage for you. There are also magazines which are available that can help you to research which mortgage may be suitable, and you can always get advice from a financial adviser.

Some of the factors that might be important to you could be

whether the interest rate on the mortgage is guaranteed to be fixed for a period of time;

whether you can take 'payment holidays' if your financial circumstances change, or pay off extra if you come into some money;

whether a mortgage offers you an extra cash sum when you take it out that you can use to pay for carpets, home improvements, or even the deposit you have to pay on the property.

You should consider the effect of potential increases in interest rates on your budget. This is particularly important if you take a product that has reduced costs in the early years of the loan and on all variable rate loans, including discount and tracker loans.

The mortgage code provides protection for you as a mortgage borrower. It sets out minimum standards that mortgage lenders and intermediaries have to meet.

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