The majority of home buyers fail to read important paperwork required during the home-buying process, according to new industry research.
61% of borrowers admitted they didn’t read their mortgage agreement in full before signing and 50% said they didn’t understand the terminology used during the homebuying process.
Half of those questioned said they found the property buying process confusing.
If you’re feeling overwhelmed by the process, here are the key things to look out for before signing on the dotted line.
Overpayments
Overpaying your mortgage can be a great way of reducing the amount of interest you owe and paying off your debt faster, but not all mortgage products offer an overpayment facility.
If you like the flexibility that overpayments bring, be sure to read your offer document before agreeing to the loan. Thankfully, most fixed deals offer overpayments of up to 10% of the mortgage balance each year, without incurring any early repayment fees.
Risk warnings
Some mortgage offers include risk warnings which can affect mortgage repayments, such as interest rate rises. If you don’t opt for a fixed interest rate, then of course this can affect your mortgage rate in the future.
It’s always best to get yourself familiar with the risk warnings listed in your agreement. As every offer will have different conditions, such as paying off credit commitments on completion, or stating that you must have buildings insurance in place. Review them thoroughly and make sure that they all work for you.
Portability
If you have a mortgage deal that isn’t finished and you're considering moving home, you may want to consider transferring it to the new property, so that you can still benefit from the rate and terms. This process is called ‘porting’ and can work if you have a fixed, tracker or variable rate mortgage.
It’s always worth checking in your agreement to see whether or not your mortgage is portable. And keep in mind that when moving property you will still have to apply for a new mortgage in the usual way. Once your lender has agreed to your new mortgage, you can then look at porting your existing rates and terms.
Check the end date
The most important thing to check in your offer document is when your mortgage deal ends. Knowing the end date allows you to know when exactly you can start searching for a new mortgage, or when to consider remortgaging.
Sometimes switching to a better deal at the end of your fixed term can be really beneficial for you. Remember, if you need to clarify any of the details or language used in your offer, always speak to your mortgage broker before signing anything.
If you're unsure about anything when it comes to getting a mortgage deal, or you just need some expert advice - please get in touch with the TaylorMade team today.
