What you should know before taking a mortgage
There are many ways in which mortgage lenders can trick you into signing for a bad product, but you can easily avoid that.
08:55 17 October 2013
House prices increase over time, and if that happens quickly, you may end up not being able to meet the expense of your mortgage payments anymore. Many lenders have mis-sold mortgages in the recent past in UK, and new regulations were set to make sure that that doesn't happen anymore. However, there are still lenders who may try to trick you into signing for a bad product.
Here is what you need to know about mortgage loans to avoid being tricked:
- Lenders should not offer you a mortgage if the period of time necessary for you to pay it back extends the time you have left until retirement;
- You shouldn't sign up for a mortgage if you can't afford to pay it out of your legal monthly income;
- If a lender promises that the mortgage payment rates are fixed, you should always check to see if they will actually remain fixed for the whole period;
- Lenders shouldn't advise you to use your mortgage to consolidate others debts. If that happens, check to see if you would end up paying more interest rate over time than you currently do;
- If you have a good credit rating, lenders should not offer you a sub-prime mortgage;
- You should never sign for a self-certification mortgage if you are actually employed;
- You should under no circumstances falsify documents to be eligible for a mortgage. If any lender asks you to do that, you should get in touch with the local authorities;
There are still many other factors you should take into consideration before signing up for a mortgage, but there are consultants out there that can do all of this work for you. So if you want to make sure that you won't have any problems repaying your mortgage, you should seek professional help.