One of the most difficult aspects of organizing a mortgage is sorting through the whole lot of mortgage packages currently available. To simplify things, we suggest you start by deciding which type of mortgage you want. This process of elimination will help you draw up a shortlist of mortgages. You can then look for a good mortgage lender who's offering the type you want. Ask an Independent Financial Adviser (IFA), or a mortgage broker, to advise you on the best type of mortgage for your needs.

It's a Buyers Market

There are hundreds of companies offering different mortgages, which means there's a lot of competition for your money. It's what's called a buyers market so you're in a stronger position to shop around than you may think. The worse mistake you can make is to think "I'm not worthy" and grab the first mortgage that comes along. Take your time and shop around.

Making Comparisons

Having decided which type of mortgage you want, shop around for the best deal on offer.

Make sure the comparison is accurate by getting "like for like" quotes from the lenders ie for the same amount borrowed over the same period. Find the application fees, the cost of the valuation and survey and so on.

The less scrupulous mortgage lenders are those who offer you in with a very low interest rate but are using it to trick you into paying their higher insurance premiums.

The best types of mortgage lenders are those who charge a reasonable interest rate and don't try to tie you in. Because they understand customer inertia and know that most of us stay with our mortgage lenders or bank anyway.

Tips in choosing a mortgage

1-Don't take the first mortgage you're offered

There are big differences in the deals you can get amounting to many thousands of dollars. So make sure you've made comparisons with others.

2- Shop around

There's a lot of competition between the mortgage providers, so shop around for better deals.

3- Look for a mortgage lender who is offering a "loss leader"

Buy with a view to get a new mortgage deal every 2 years or so.

4- Don't be taken in by a low sounding initial interest rate

This is known as the headline rate. Very low rates usually come with cunning long term tie-ins.

5- Beware Redemption Penalties

When you take out a mortgage you have an agreement with the lender. This covers the amount you repay and is set for a particular period. If you want to get out of this deal before the period, you'd probably have to pay a redemption penalty. This is a charge which supposedly compensates the mortgage lender for the time and expense of your leaving.

6- "Overhanging lock-ins"

This is a penalty for leaving a lender after a special deal interest rate has come to an end (ie not during the agreed timescale of the deal).