Self Cert Mortgage Rates
Self Cert Mortgage Rates | Its Not About The Low Headline Rate
Just ten years ago if you couldn't prove your income then getting a mortgage was something of a challenge because not many lenders would consider your circumstance. But nowadays there are a choice of a few self cert mortgage rates out there - and so much choice can make some borrowers feel a bit lost. The thing to remember is picking a mortgage isn't just about finding the lowest headline rate. Because there's a lot more behind self cert mortgage rates than just that.
When it comes to mortgages, low rates rule. But first you need to understand the whole product not just the rate. Because all self cert mortgage rates vary throughout the lifetime of the loan, choosing a product based on the annual percentage rate is not necessarily the way to go. All mortgages have a set term or lifespan, normally 25 years. But in the real world very few people stay on the same product for a quarter of a century - they might move to a more competitive lender, refinance or simply remortgage in order to get a better rate. The annual percentage rate is the overall cost of the mortgage over the 25 years (or whatever the term is). This will include any discount period as well as the standard variable rate. Another factor that affects self cert mortgage rates is the amount of money you need to borrow. Lenders call this loan to value - to put it simply, the percentage of the property value that you want to borrow. The higher the loan to value the higher the rate.
When picking from all the self cert mortgage rates out there, the first thing to decide is how you want your interest to be calculated. Self cert mortgage rates are determined in several different ways. The first option is a fixed rate where the interest remains flat for a pre-agreed period of time. After this fixed rate period expires fixed self cert mortgage rates change to the specific lender's standard variable rate, which is normally more expensive. Another option is choosing a tracker rate which literally tracks the rate of interest set by the Bank of England every month. Again, nearly all tracker rates have an expiry date after which you will be charged a standard variable rate set by your lender. But remember it's not all about rate. Low self cert mortgage rates are likely to attract a larger application fee, which might not suit your circumstances. A mortgage broker will be able to talk you through the true cost of a mortgage, taking the interest rate and any associated fees into consideration.
Another thing to consider when looking at self cert mortgage rates is what the product actually offers you. Features such as being able to over pay, take payment breaks or even pay off the mortgage early may justify you paying a slightly higher rate. Some products might tie you into the product for a period of time that isn't convenient for you - and even the best self cert mortgage rates aren't worth that.
So, sniffing out the best self cert mortgage rates isn't as simple as just looking at the headline rates. There're lots of things to consider, but a bit of shopping around is likely to all it takes to get the right product for you.
