When is the right time to take out a mortgage?

Robert Carthy of Mortgage Advice Bureau at Heywoods comments on borrowing, credit scores and when the best time to take out a mortgage could be: �Every little helps� or so says a supermarket�s f...

Robert Carthy of Mortgage Advice Bureau at Heywoods comments on borrowing, credit scores and when the best time to take out a mortgage could be: �Every little helps� or so says a supermarket's famous advertising slogan. But how long should borrowers look to save up before applying for a mortgage?

Despite the many changes in the mortgage market in recent years, the rule of thumb remains the bigger a deposit you can raise the lower mortgage rate you will be offered. For instance, a deposit of 10% rather than 5% will typically give a borrower access to lower mortgage rates.

Saving can be a slow process and current savings rates are low across the market, so many borrowers enlist the help of family and friends to boost the size of their deposit and give them access to lower rates - although this is not an option for everyone. While saving, borrowers should remember to make sure they clear as many existing debts as possible and take steps to improve their credit score. This can include taking out credit cards and then repaying them in full at the end of the month, which shows mortgage lenders that you are a trustworthy borrower who is likely to pay off their mortgage and not miss a payment. Borrowers can check their credit scores online, with many firms now offering this service for a small fee.

One thing for certain is that would-be home owners with smaller deposits have more options following the launch of the Help to Buy scheme. The government programme has opened up the 95% loan-to value market with leading high street lenders and local building societies all reducing rates.

Mortgage Advice Bureau research found that there are 907 more mortgage products on the market at present than a month ago. This is the fastest rate of growth seen for almost three years. Even those lenders not directly taking part in the scheme have lowered rates to compete, meaning the current number of high LTV mortgages is at its highest level since the financial crisis of the last decade.

The government schemes are most commonly used by first-time buyers but are open to all types of buyers. Most of the country's biggest lenders are either taking part in the schemes or have plans to join in the near future. The Bank of England has promised to keep the Bank Base Rate at 0.5% until unemployment in the UK falls below 7%. This was not expected to happen for some time but recent figures were better than expected and some analysts feel interest rate rises may now be on the horizon.

So with mortgage rates at a historically low level many borrowers are capitalising on this and jumping onto the housing ladder now. Remember everybody's circumstances are different and a professional mortgage adviser will be able to guide you through all the options available.

Robert Carthy is from Mortgage Advice Bureau at Heywoods �� for further information call: 01782 617343, Email: Robert.carthy@mab.org.uk �or visit: https://www.heywoodsproperty.co.uk/mortgages.htm.

Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice.� The actual amount you pay will depend upon your circumstances.� The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.