Have you noticed that mortgage lenders are advertising very attractive mortgage interest rates more and more. However, it seems most people who apply are either refused or the offer comes with hidden extra costs or high upfront fees.
Change and uncertainty makes a lender very nervous. So, mobility and change jobs, make fitting a lenders criteria on 'through life affordability' for the "teaser" rate is hard, very hard.
Also, borrowers now appreciate that "teaser" rates for mortgages have very strict criteria and very few people, perhaps least of all services personnel, fit the risk or earnings profiles required for these deals. But, even if your application is successful, the product may not be best for you.
Why? Still too many people mistakenly think that opting for the lowest rate is the best value deal, according to the experts. Teaser rates are often associated with much higher set up fees and so, you really have to compare the entire cost of a mortgage over your intended period.
Over the short lifetime of the deal, the difference in total cost of your mortgage between the teaser rate and the right mortgage can be thousands and surprisingly it's the "cheap" teaser that can be thousands more expensive. Being with the right lender, with the right product is more important than chasing the next ‘best’ deal.
Charlotte Nelson from Moneyfacts.co.uk said: "While these low deals look great on paper they are often compensated by high fees that can scare even the most seasoned borrower.
“The low rate high fee favours those borrowers looking to purchase properties at the highest end of the housing ladder. However, large fees can turn what appears to be a cheap deal into a costly one for the majority.
“Borrowers choosing a two-year fixed rate, will find the size of the arrangement fee particularly important, as the short-term nature of the deal means that borrowers will have to remortgage relatively soon and could again pay yet another fee.
“It can often be a torturous process looking for a mortgage as there are so many costs affecting the overall price. However borrowers need to not be swayed by the low headline rate and work out the true cost of the loan."
Which? and the Council of Mortgage Lenders (CML) have worked together to create a tariff of mortgage charges to help customers to understand fees and allow them to compare fees for different mortgages more easily.
TSFL know that customers' situations and circumstances vary, and that even if we try to be, we won't be the best value for everyone, all the time.
As soon as we are able, as well as providing excellent value and transparent mortgages wherever we can, we'll also supply you with tools and information you need even if it means that you take some of your business elsewhere if that's better for you.