Ten facts to help you get the best mortgage

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No matter whether it will be our first mortgage or you are remortgaging, some knowledge is necessary to have a successful deal. Here we present some facts about the world of prices and mortgages of nowadays.

1. Halifax says the average costs for a home in the UK is now about £204,552.

2. According to the Mortgage Advice Bureau, the prices for houses have risen by 9% in a year, with mortgage rise of 4%. The average application for mortgage this year, including the rise, is for £167,842.

3. The MAB also says that the average deposit this year is £71,301, which means people have more opportunities to have a better remortgage deal.

4. Which? reports that the average person buying real estate for the first time puts down a 17% deposit. At the average house price of £204,552 that means you need to save up about £35,000.

5. On top of that, you’ll need a further £12,000 to cover the cost of moving, according to Post Office Money. “Potential homebuyers should set aside savings specifically for these costs,” says John Willcock, head of mortgages at Post Office Money.

6. The number of people with interest-only mortgages is steadily declining. They are much harder to get hold of now, and if you do apply for one you will have to prove you have a strategy in place to repay it.

7. Mortgage rates continue to sit at historic lows, with deals available that charge as little as 1.14 per cent interest. Many experts predict that interest rates will start to climb at some point this year, so it could pay to lock in a low rate now. Fixed rates are proving increasingly popular as homeowners try to protect themselves from rate shocks.

8. A poor credit history and affordability problems are the two most likely reasons for your mortgage application being rejected, say the experts. “Would-be borrowers should get a copy of their credit report and try to improve their score,” says Brian Murphy, head of lending at the Mortgage Advice Bureau. Be honest about your spending. “Getting the monthly budgeting figures down correctly will really help an adviser get to grips with affordability criteria,” says David Hollingworth, a mortgage broker at London & Country Mortgages.

9. Mortgage terms are getting longer. Traditionally, new mortgages are taken out over a 25-year term but more than a fifth of homeowners are now searching for mortgages with terms of 30 years or more, according to the Mortgage Advice Bureau. Remember, however, that a longer term means the amount of interest you pay will rise significantly.

10. Mortgage lending was at a seven-year high in November, according to figures from the British Bankers’ Association. There were 44,960 mortgage approvals, with a total value of £7.9 billion, made to homebuyers in the month.

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