Is now the best time to get a mortgage?

The UK property market has gone from strength to strength over the last decade, particularly in the south east. While many homeowners have seen excellent return on investment during this time, it is now resulting in many people taking out much larger mortgages than they might otherwise be comfortable with. This problem is being further compounded by over-stretched budgets being further battered by rising interest rates. This is making getting onto the property ladder seem a necessary evil for first time buyers. But is it necessary? The common attitude towards buying property is illustrated by the idea that it is better to be paying off your own mortgage each month than to be paying off your landlord?s mortgage while renting. Rent money is often seen as dead money; renting can seem like an endless cycle that chews up your chances of saving up a deposit for your own home, but at times like these, perhaps renting is not the financial dead-end that many people might believe.

Homeowners

With property prices rising in the UK year on year, owning a piece of the action has proved one of the most risk-free areas of investment. However, having your wealth tied up in your home can be a risky business, particularly if house prices begin to drop, or interest rates push your monthly repayments out of your comfort zone. The reality is fast becoming that homeowners are finding themselves vulnerable to the situation caused by rising house prices. A couple looking to sell and buy their second home, and move up the property ladder - perhaps from their first home to a larger family home - may find that as they have watched the price of their own home rise and rise, the price of the type of house they are looking to purchase has risen in equal measures. As a result of this, fewer people are selling, simply because they cannot afford to buy elsewhere. Growing in popularity, particularly in the capital, is the choice of homeowners extending their current property to cope with their changing requirements. Adding extra space to your home, by extending into the loft, garden or even digging out the area beneath the house is now becoming a much cheaper alternative to seeking the next step on the property ladder.

Renters

So, for non-homeowners, is renting such a terrible option? Perhaps not. In reality, you are far more likely to be able to afford a home of suitable size and location through renting than buying in the current market; and renting may offer much greater value for money, particularly if moving from renting to buying means a downsize in property size and a longer commute. With homeowners? finances being stretched month on month as interest rates rise, the best option for renters may be to sit tight while renting and wait for properties to enter the market at reduced value, either as a result of foreclosure, or as developers begin to sell off non-profitable investment.

Furthermore, with the example set by the sub-prime mortgage lending crisis in the US, borrowers should exercise caution when seeking a mortgage. Borrowers may find that they are being offered mortgages by lenders and brokers that are unaffordable in order to keep the market strong ? or worse still, they might not find themselves over-committed until it is too late.

The best way to ensure your mortgage deal is competitive is to shop around and use independent mortgage comparison services, such as Money Supermarket or Totally Money.Totally Money is an independent tool for those trying to find a mortgage that is right for them. Totally Money is able to give you all the information you need regarding bad credit mortgages