How to get the best mortgage

If you are tired of seeing your money disappear down the drain then perhaps I can help.

Hi, my name is Monty Burn and I'll always try my best to advise people in financial difficulty FREE of charge. I am genuine and I do not accept payment for my help. Now then, before I offer you free advice on how to secure a good mortgage I'd like to point out something that few consumers know.

IMPORTANT NOTICE

KNOW YOUR RIGHTS WHEN RETURNING UNWANTED GOODS TO A STORE.

Only recently did I learn to my cost that by law you are not legally entitled to any form of refund providing the goods you purchase are not in any way faulty or the packaging is not disfigured. YOU HAVE NO RIGHTS AFTER PURCHASE. The sales of goods act is clear that stores may make a good-will gesture of a cash refund or offer you a credit note but they are not obliged to. Neither are stores obligated to display a goods returns policy at the point of sale. My advice is to ask the store assistant what their specific store policy is - take the name of the assistant, keep the receipt with the product, and if you have to return an unwanted product take the receipt along with the same credit card you may have paid with and refer to the assistant by name when requesting a refund/credit note. As long as you are aware of your rights it can save some embarassing arguments if you decide to return any unwanted goods that are not faulty. Finally my best advice is to refrain from buying goods for other people particularly clothes as they are so personal - let the person who is to own the product or wear the clothes make the choice themselves. Please, please pass this information on to friends and family as they will thank you one day. Now for that mortgage advice:

The best way to get the right mortgage for YOU (not the person selling the mortgage) at the best rates is by using a recommended Independent Financial Adviser (IFA). Different lenders have good deals that change every single day so you could well be selling yourself short by walking into your high street lender instead of sourcing the market place.

Here are some questions you need to ask an IFA:
Q1 - "How many lenders do you use? The number of lender's the IFA uses is totally different to how many lenders they source from. The software used by IFA's will display virtually every lender and every product but most IFA's will only use c 6 lenders as they build a rapport with those six. In general you may consider choosing the IFA who uses the most lenders if the panel of lenders, the deal and the terms and conditions (T&C's) are right.

Q2. What lenders are currently not charging an arrangement fee and how do their rates compare with other lenders charging an arrangement fee? (Most lenders now charge c£2k arrangement fee in their endeavour to stop "rate tarts" from moving mortgages to competitors) Ask your IFA/lender to calculate the total cost, with an without an arrangement fee for the term of the interest rate.

Q3 - What broker fee do you charge? (This can vary vastly from as little as £500 to 2% of the loan. Negotiate down as this fee will have to be paid on completion or added to your loan where you will pay interest on it).

When remortgaging Always, but Always compare the current "Settlement fee" (The total amount you owe to the lender today) with the amount your mortgage will be if you decide to remortgage. You might think twice when you see the add-on's such as arrangement fee, valuation fee, broker fee additional insurances to cover the additional amount borrowed etc). Your repayments may go down for a short period of say 2 years but overall you could pay a lot more for your house. Take this into account when remortgaging or "consolidating" your debts via your mortgage.

If you are settled and believe you are not going to move home for say 2 to 3 years consider taking a fixed rate mortgage so you can budget for the duration of the fixed term. However, beware of any redemption penalties if you move lender during the fixed term as this could wipe out any potential savings. Coughing up for a redemption fee can really hurt and could in certain cases wipe out any equity you may have in your home.

Negative equity can be over-hyped as the only time it affects you is if you want to sell up or you want to raise money on your asset. Otherwise stay cool and you will see your home appreciate in value in due course as history suggests that will be the case.

One of the best insurances you can ever take out is Accident, Sickness and Unemployment (ASU) as you are insuring your most valuable asset - YOUR ability to earn an income. If you are unable to earn an income you could face losing your home so insure against the possibility of such an event. However, do NOT be duped into taking out single premium ASU as you will generally pay double the amount and it is added to your mortgage. Pay monthly and ask for 3 months FREE cover to get you started.

When taking out a mortage calculate how much your monthly repayments would be if the interest rates increased by 2 pts. This is the safety margin I recommend you build in to your future mortgage payments even with a fixed rate. In my book the mortgage Bible I recommended those taking out a mortgage to use the 2pt safety margin and I only wish more people would have read and taken my advice as many are going to lose their family homes due to affordability. Think carefully before you make any decisions, do your sums and do not make any rush or rash decisions as it could cost you a lot of unecessary cash.