There is no doubt that mortgages can be confusing. With so many products available, it is difficult to know which is best suited to your needs. And that is where the danger lies - a wrong decision could end up being a very costly error. Before making any decision, one must seek professional advice, but it is always best to be aware of your options, your facts and aware of what you seek from a specific policy. In this way, you make the best decision possible.

Unfortunately, mortgage lenders don’t give their money away for nothing! As with any loan, they make their profit by charging interest. Since nothing comes for free, be on the lookout for hidden costs and charges, and enjoy the benefit of what your mortgage policy has to offer. This is a reason for mortgages to become confusing. Lenders do not just offer one rate of interest. In fact, they will more than likely offer several at the same time. What differentiates them, however, are the options offered and the restrictions imposed time to consider the different interest rate options open to you. As always, there are pros and cons to each, meaning that what is suitable for one person may not be appropriate for another. There are more to mortgages than interest rates and repayment methods!

Over recent years, as the mortgage industry has become more sophisticated, new mortgage and insurance products, have been introduced, designed to meet modern needs. Many of these offer real benefits to the borrower, and are well worth considering. So, once you have decided that a mortgage is for you, how do you actually go about obtaining one? There are plenty of places where you can get a mortgage - go online, look through the phone book or walk down the high street and you will find many firms and institutions offering to help.

Despite this, there are really only two options available. You can obtain a mortgage directly from the lender, or you can go through a broker. For those that already own a property it's important to be able to sell it. Buying your first property, and obtaining your first mortgage, can be daunting. After all, it is one of the most important financial decisions you will ever make.

As if that isn’t enough to cope with, there is also the current housing boom. Soaring prices have either put people off purchasing a property, or have encouraged them to take out mortgages, which are simply not affordable. So what should a first time buyer do? The best bet it to try to save as much of a deposit as possible. If you are not able to save any, then don’t worry, as there are lenders who offer 100% loan to value mortgages. These are, however, generally quite expensive when compared to mortgages where a deposit is paid. Most lenders will require at least a 5% deposit.

You should also avoid the temptation of borrowing more than you can realistically afford. As property prices have rocketed, some lenders now allow you to borrow up to five times your salary. This is not recommended - by borrowing so much, you run the risk of financially over committing yourself and defaulting at some point in the future. Moreover, there is also the chance that you will find yourself with negative equity i.e. where the mortgage is actually greater than the value of your property.
Most lenders will allow you to borrow a more affordable amount. This is usually 3.25 x salary for a single person or 2.5 x joint salaries for couples.
And don’t forget the other costs you may incur. Your lender may require payment of a Mortgage Indemnity Guarantee, especially if you only have a small deposit. Then there are fees as well as the possibility of having to pay stamp duty.