Why right now could be the best time to get a mortgage
With British Summer Time about to end and Christmas looming, many potential buyers might think about putting off a mortgage application until the spring. However, mortgage experts Choice Finance advise that, for those looking to buy, now could be the best time based on low interest rates and low stock of homes for sale.
Earlier this year, the Royal Institution of Chartered Surveyors reported that the number of properties for sale was at a 40 year low, a trend they expected to continue. Traditionally, the winter months see a lull in the housing market due to Christmas expenses and unfavourable weather. So, with less demand for houses, it can be easier to negotiate a sale under the asking price.
Interest rates remaining incredibly low also means there is an array of brilliant deals available for buyers at the moment. But those deals are not expected to be there for long. With a rise predicted very soon, the Bank of England’s Monetary Policy Committee (MPC) has edged ever closer to raising the base rate from its historic low of 0.25% over the summer.
Based on last year’s sales figures, and the likelihood of an imminent interest rate rise, Manging Director of Choice Finance Matthew Pennell urges home hunters not to put off their search until the New Year:
“Lenders have really tightened up their approval process, but you can use the ebb and flow of the market to your advantage. House sales get more sluggish the closer to Christmas we get, so those looking to buy soon could clinch a better deal in the weeks ahead.”
After the New Year, many find their finances aren’t in the best shape for mortgage approval. Lenders scrutinise any recent credit applications and an applicant’s use of an overdraft facility, so for those who have splashed out over the festive period, January might not be the ideal time for moving home or buying for the first time, as Matthew explains.
“In a market where it’s already very tough to get a mortgage, borrowers really do have to be in tiptop shape. Christmas and New Year is typically a period of excess, so this could raise a few question marks when lenders run credit checks.”
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