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Setting up a mortgage

A mortgage, like most other financial products, is flexible in many ways and this means there are plenty of factors to take into consideration when setting one up.

Probably the biggest decision to make is the length of the borrowing period. This will have a big impact on how much you end up paying back – the shorter the period, the less interest will be due. It is necessary to consider you age, income and future goals at the forefront of deciding on a mortgage term length.

This is another factor that will have a direct effect on the amount you will end up repaying monthly. With the economy suffering over recent years mortgage lenders steadily withdrew the higher rate mortgages, and the amounts people had to deposit increased. The typical deposit for a first-time buyer is 10 percent of the value of the property, and the more you can find for a deposit, the more you will save in the long term.

Other costs
There are plenty of other costs associated with taking out a mortgage that may not be as obvious, but can still be very costly. These are the things to look out for:
• Stamp Duty
• Mortgage Arrangement Fees
• Legal Fees
• Building or Homebuyers survey
• Land Registry Fees
• Local Authorities Search
• Mortgage Indemnity Guarantee

Interest Rates
It is as important to shop around when looking for a mortgage as it is for any other financial product. Different providers target different sectors of the market, so a first-time buyer will most likely turn to a different lender than that of a more mature borrower. In order to get the best rate it is key that the whole of the market is explored.

Can you afford it?
This seems simple, but you need to forecast as mortgages are such a big commitment. If you are in a job with low security or a pay that is heavily based on performance, it may be wise to delay taking out a mortgage until a later date. Defaulting on mortgage payments can land you in big trouble.

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