Comparing Mortgages and other Financial Products - Does it actually help?

The following article is a guest post that aims to aid it's readers in achieving cheaper mortgages and delves into some of the lesser-known benefits

Cheap mortgages

Many people in life say that you have to speculate to accumulate, but just how much do is too much?

For life’s most important purchases, saving money is imperative; especially if you’re forced to stay within a specific budget for fear of racking up debts. This is also true in business. Knowing the outgoings don’t outweigh the incomings is something that any business owner keeps an eye on.

When taking out a mortgage, loan or even something relatively minor like a credit card, getting value for money is something which in the long run could be extremely valuable.

If you are looking at creating a small property portfolio finding value at a time when house prices have remained sky-high for a number of years might seem like a thankless task.

House prices have slowed and remained steady albeit at a high price, which has proved frustrating for many house-hunters, especially first-time buyers. True can be said for the sellers as the higher prices meant that some houses have been on the market for more than two years.

Regional variations in mortgages make a difference

In the UK as a whole, the average house price is just a shade over £238,000, but this figure varies wildly in different parts of the country. In South East England, the average price for the last three months of 2012 was £279,593 while in Northern Ireland, it stood at a considerably lower figure of £138,966 for the same period – less than half the price.

Whatever the price of a home may be, the challenges for people seeking a mortgage in the UK are the same: finding a willing lender, getting reasonable interest rates and choosing a product which lasts for a palatable period of time. Going to the first bank or building society you see might seem like a quick and easy option, but a lot can be said for comparing products from different lenders.

Contrasting means coins!

Experts on personal finance suggest that comparing prices is the answer when trying to get a cheaper mortgage. To compare prices, there are a few things you could do, including:

·        Contacting lenders directly. This might seem time-consuming, but by finding out in detail what types of mortgage they can offer and how much they cost, it can give you a clear idea of what to expect – this is a must for any would be property tycoon as you may find that buy-to-let mortgages are harder to find.

·        Go online. Using a comparison site is also a good place to start as you can see the facts and figures all on screen. Sometimes however if you use a comparison site to find the best deals and contacting the companies individually may give you better rates.

·      Consider the types of mortgage available to you. Fixed rate, variable rate, capped rate and tracker are the four main types offered by the majority of banks and building societies, and vary in the rate of interest they offer for the duration of the mortgage. Many people who are looking to build property portfolios often use interest only options.

To make a more informed decision a mortgage broker can help and should steer you in the right direction when you are trying to get the cheapest and best mortgage possible.

It is possible for you to save thousands on interest payments in the long run.