Mortgage guide

If you're buying for the first time, re-mortgaging or buying a new home, these ten simple steps will help guide you through the maze of mortgage jargon and find the best deal available.

1. First things first
Work out your maximum deposit, leaving yourself at least £5,000 in the bank for bills and fees and emergencies.

2. How much can I borrow?
Mortgage providers base the maximum loan they will offer you on a multiple of your income. As a basic rule try not to borrow more than four times your salary, or more than 75% of the house price, if you want to obtain a decent rate of interest.

3. Know what you want
Now for the tricky bit. You're going to have to 'make a call' about what you think will happen to interest rates, something nobody knows and few financial advisers seem to agree about at the moment. If you think interest rates will rise, you're safest with a fixed rate mortgage. If you think they will stay low, go for a 'discount', 'tracker' or 'flexible' mortgage. A medium bet would be a 'capped' mortgage although you may find less choice in this category. If you don't know the difference, read our mortgage glossary before you continue.

4. Compare 'TOTAL' costs
Be prepared to do a bit of maths. So far there doesn't seem to be a decent website that actually helps you compare the true cost of a mortgage AND all the fees. For true cost comparisons you need to add any and all 'arrangement', 'set-up', 'transfer' fees and any 'cash-back' to the total monthly payments over a fixed time frame, giving you the TOTAL cost of the mortgage in real money. Compare mortgages using these total costs, not by 'AER' or any other figures.

5. Make them work for you
Find a "fee free", "whole of market" Mortgage Broker and set them to work for you finding the best deals. Brokers normally get paid from a commission after you have signed-up for a mortgage, so you can get them to do some initial research for you for free, with no obligation to take out a mortgage.

6. Do your own homework too
Check the banks directly and use a comparison site to compare deals and get a good idea of what's out there, you'll often find something the broker may not have mentioned.

7. If you see a deal, get it in writing
If you see a mortgage deal you like, get the lender to make you an offer. Deals change often these-days but an offer from a lender (in writing) can secure a deal that may not be available later, sometimes for up to 45 days.

8. Do the deal
Once you've got an offer on a property accepted set the wheels in motion by applying to your chosen lender. If you have chosen a product recommended by a broker make sure you know the full amount they intend to charge you before you sign anything.

9. Keep the ball in their court
Now comes the slightly tedious bit, finding and sending all the relevant documentation and paperwork to your solicitor or conveyancer. You can often keep costs (and wasted paper) to a minimum by using an online solicitor, but make sure you keep the ball in their court by having your ID and income documents at hand and being as quick as possible to return all the forms if you want a quick transaction.

10. Chase them up
Don't presume everything is going ahead wonderfully if you have not heard from your solicitor. Phone them, email them or write to them, daily if you have to, but be prepared for the completion process to take anything from six weeks to several months.

Put the bubbly on ice
If all goes to plan, you should soon be holding the keys to your new home and feeling confident you have secured a good deal with your mortgage. If you've got other tips or advice, or have had trouble finding a mortgage let us know in the comments below.

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