Is a fixed-rate mortgage right for you?

Mortgage interest rates are currently at an all-time low and for those borrowers who are able to meet the relevant lending criteria; there has probably never been a better time to get a loan. Fixed-rate deals in particular are attracting great attention, with deals available for up to ten years! This idea of having certainty over your mortgage repayments is certainly attractive, but one thing you need to look out for when considering a fixed-rate deal – no matter the term –  is the possibility of having to pay a sky-high fee to arrange such a mortgage.

This increase in the number of deals out there is attributable in part to the bank of England’s funding for a lending arrangement that has provided inexpensive funding for banks and financial institutions to be used for mortgages and loans for small companies. The downside of this arrangement is that with banks now having another source of cheap funding, they no longer feel the need to offer compelling interest rates to savers, leaving them with a much meager return on their capital.

So you can see from the above, that when it comes to deciding on the best deal for you, it’s essential to factor in the cost of any arrangement fee and see how this affects the overall package. It’s probable that paying a high arrangement fee will be more acceptable where you are fixing your mortgage for a longer period of time, say for five years or maybe longer. That way, the potential savings you will make from reduced monthly mortgage payments are more likely to outweigh the cost of the fee over the term of the deal.

The amount you are borrowing can also have an effect, so check your figures carefully before you commit. Well, the first step is the most important. Facing up to the fact that you have a problem is a significant step forward and one which many people are unable or unwilling to take, preferring to bury their heads in the sand until the situation is beyond resolution.

Budgeting is essential if you are to free yourself from debt. Preparing a monthly budget is not particularly complicated, but it has the great benefit of letting you see clearly in black and white just exactly where your money is going every month. You can prepare your budget by hand – simply jot down your income and regular outgoings on some paper. Alternatively, you may prefer to create a budget using one of the many budgeting software solutions available for use on your pc or mac.

Whichever method you choose, once you have that information to hand you should be able more easily to identify areas where you can cut back and make savings. It is important that you are completely open and honest with yourself when you are assessing your budget. For instance, when you are calculating your income for the month, it’s your take-home pay that counts, not your gross salary. If you have any other regular and predictable sources of income – maybe a part-time job or something similar – then by all means include this under income as well.

Likewise, when you are looking at areas where you might be able to make some savings top online casino it is important to be realistic. You may think you could get a better deal on your mortgage, but if your credit history is not that great because of the debt you have already accumulated, then it is perhaps unlikely you will be able to avail yourself of the best mortgage rate, especially since lenders are adopting an ever more strict approach to mortgage lending these days.

Always remember that if you find all of this too daunting to deal with on your own, don’t give up or get dispirited. There is plenty of help available to assist you in tackling your debts. You could seek the assistance of the local citizen’s advice bureau and there are lots of excellent resources online as well, such as the money advisory service. The important thing when it comes to trying to get you out of the misery of debt is to take action. If you do nothing, then you are almost certainly going to be in the same – or worse – position in a few months or even years’ time. Grasping the nettle of debt does not mean you will be able to transform your situation overnight, but by taking positive, regular, consistent action to address your debt problem, you will eventually reach the stage where your debt problems are a thing of the past.

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