Introduction
Before committing to a mortgage, it is wise to be in a position where you fully
understand the product and know exactly what you are buying. Here is a list of questions
to ask about yourself and the mortgage, which will help you identify any areas you
have not yet thought about:
Type of mortgage:
- Have you chosen a method of repaying the mortgage?
- Is this mortgage available with your chosen repayment vehicle?
- What is the starting headline interest rate?
- What is the APR?
- What will be the total interest repayments?
- How much will your monthly payments be?
- Is this mortgage available for the loan-to-value rate that you require?
- How often is interest calculated on the outstanding balance?
- Do you fully understand the type of introductory offer, if there is one?
- How long does the introductory period run for?
- What will happen to the rate after the introductory period is over?
- How will this affect your repayments?
- How often is the rate reviewed and amended for changes in the base rate?
- Does the lender use some other measure to decide when to alter its rates?
- Do you have a strong opinion regarding what is likely to happen to rates in future
years?
- How will your mortgage be affected by these changes?
- Will you be able to cope if the rate rises and your repayment rises with it?
- This type of mortgage may fit your circumstances today, but are your circumstances
likely to change?
- If so, is the mortgage flexible enough to cope with the changes?
Product features:
- Will you have to pay an application fee?
- If so, how much?
- Will you have to pay an arrangement fee?
- If so, how much?
- What are the MIG fee thresholds?
- Will you have to pay it?
- If you must pay, how much will it be?
- Can you add it to the loan?
- How much more would you have to save to cross the next MIG threshold?
- How long does the redemption penalty period run for?
- How much will you be penalised if you repay your loan within this time?
- Does the penalty period last longer than the introductory offer?
- Do the penalties apply to part repayments?
- Is the product portable?
- Can you take payment holidays?
- Is it possible to increase or reduce your payments?
- How often can this be done?
- Can you pay off additional lump sums?
- Is there a minimum amount?
- When are these payments credited to your account?
- Are you allowed to extend or reduce the term of the repayment?
- Is there a facility to obtain further advances?
- When can you start doing this?
- Are there any conditions attached?
- What will the rate of interest be?
- Is there a full current account facility?
- Are any ancillary products required?
- Can you choose your own provider or do you have to take the product supplied by
the lender?
- Is it a CAT marked mortgage?
- What incentives are there with the mortgage?
- Is there any cashback?
The lender:
- Will they lend you as much as you need?
- Does the lender comply with the mortgage code?
- Is the type of property you are buying acceptable for this mortgage?
- Will you meet their standard lending criteria?
- Will you need a guarantor?
- Are the payment terms flexible enough?
- Are you happy with their policy on how they handle late or missed payments?
- Have you seen the schedule of other charges?
- Do you understand what they all are and when you would be required to pay them?
- How long will it take to process your application?
- Are the advisers or customer service staff efficient and helpful?
- Is the sales and product literature clear and easy to understand?
If you can't answer all of these questions, then you probably need to either do
a little more reading of this site, or investigate the product or lender some more.