Best Mortgage Deal

Looking for the best mortgage deal can be a long and often tiresome process but it is definitely worth doing when you consider the money you could save. Getting the best mortgage deal is largely dependent on the amount of money you have to spend on a deposit, your current income and your projected future income. These factors are going to determine which type of mortgage is best for you. For example if you do not have a lot of money to contribute toward a deposit but you have a good income which is set to increase in the future you might be better off going for a 100% mortgage or a 95 LTV mortgage with low deposit requirements.

These sorts of mortgages enable you to get the property you need without having to hand over a lot of cash at the start. The drawback of these mortgages is that you often get set high interest rates. Nonetheless this sort of deal suits many people who cannot get the money they need to put down a costly deposit. If you do not have a high income you might want to get a shared ownership mortgage which is best suited to people who are on a low income. With a shared ownership deal you spilt the cost of your mortgage monthly repayments and deposit with a housing association who jointly own the property you want with you.

What Interest Rate to Get

Regardless of the type of mortgage you want, you are going to have to make a choice about the type of interest rate option you want on your deal. Picking the right interest rate option is very important if you want to get the best mortgage deal you can. There are six options to choose from, these are fixed, discounted, capped, tracker, LIBOR and standard variable with cash back. The best mortgage deal will be one that has an interest rate option attached to that is well suited to you. Each of these options sets your interest rate in a slightly different way.

For example, the fixed option means that your interest rate will not move for a certain period of time. This sort of option is best for people who like the assurance and security of knowing how much their mortgage repayments will be every month. The tracker option on the other hand would be the best mortgage deal for someone who is a bit more of gambler.

This is because a deal with the tracker option means your interest rate is going to go up and down as the official bank rate does. If the official bank rate is low, it means you make a big saving, however if the official bank rate suddenly shoots up your monthly repayments are going to go up as well and you will lose money. The LIBOR rate is similar to this but the rate that is tracked is the London InterBank Offered Rate rather than the official bank rate.

The capped rate is a popular option because it acts as the tracker rate does however your rate is capped at a certain number meaning that if the official bank rate shoots up beyond this number, you will not suffer the additional costs. If your income is relatively low and you do not predict it to go up any time soon then you might be best suited to the discount rate option. With this option you are set your lender's default standard variable rate but at a lower rate than usual for a number of years. This can help you save a lot of money in those first few years.

Getting the Best Deal

To find out about the special mortgage deals you can get you might want to talk to an adviser. An adviser can be found at a number of organisations such as banks, building societies, charities or financial consultancies. They can talk to you about what your best mortgage deal would be and point you toward the lender who offers such a deal. They can also help you decide what type of interest rate option you should go for.

So with their help you can get the best mortgage deal both in terms of your interest rate option and your overall mortgage type. An adviser will suggest the best interest rate option for you based on your circumstances and will discuss in detail any worries or confusion you have. With their expertise and a little bit of research you should be able to find the best mortgage deal for you in no time at all. Once you have decided what you think is the best mortgage deal for you is, all you have to do is submit your application to your prospective lender.