As the recession hits and the credit crunch bites, this is possibly the best time for tenants to bag a good rental deal. With house prices falling, prospective first-time buyers are happy to rent until a house becomes affordable, and there are plenty of bargains to be had. We follow that with important tips for home owners and how to find the best mortgage deals.
The mortgage market has shrunk by two thirds in the past year, but there are still 3,400 mortgage deals available. If you are coming to the end of your current deal, move quickly to find the best new deals available.
Our top 10 tips for tenants and homeowners include:
1. Understand the market
The rental market can change quickly, so it is worth doing plenty of research before viewing property. Search the internet as well as the estate agents windows, and never pay more than the going rate. Make an offer as many landlords are now prepared to drop the advertised price. You can establish rental prices in your area from online lettings websites.
2. Promote yourself for cheaper rent
If you have been renting from your current landlord for a long time and are considering moving to a cheaper property, ask your landlord first if he could reduce the rent. If you have been a good tenant he may want to keep you, so a rent reduction may be offered. Otherwise, if you are looking for a new rental agreement elsewhere, tell the new landlord about your rental history in the previous property, particularly if you have never made a late payment etc.,
3. Take your time
If you are looking for a new rental property, you should give yourself plenty of time to find the right place for you. Don´t wait until the end of your current contract to start looking for a place as this will reduce your bargaining power and could force you into renting an unsuitable property. Also, try to negotiate for a longer rental period of up to two years which will save the landlord time and hassle and may result in a discount for you.
4. Reduced rent in exchange for work
Some landlords will reduce the rent on a property in exchange for some maintenance jobs. Offer to clear the garden or paint the interior of the house for a rent reduction. You may also negotiate a cheaper deal by accepting a flat unfurnished. This may work out more expensive in the short term, but you can slowly build up a house full of furniture for your first home.
5. Negotiate terms and conditions
Learn to negotiate with your landlord so the terms and conditions benefit both you and him. Remind him of the positives to both sides, for example, of a two year rental contract, which will save him the hassle of changing paperwork and advertising costs and will mean you have more security.
6. Confusing mortgage deals
Most mortgage deals can be arranged through brokers, although some lenders only offer mortgages directly to customers. Before you decide to switch your mortgage, speak first to your current lender to ask if he can offer you a better deal. Speak to brokers and to lenders directly to ask about special deals and find the best option for you.
7. The best mortgage rates
Due to the recession, there has been a massive reduction in the mortgages available, particularly to new lenders. The best rates are normally reserved for borrowers with at least 25% equity in their property, so to qualify for the best deals try to overpay each month or clear a lump sum from your debt. Check if there are any penalties for doing this and whether it is still worthwhile to pay off as much as you can in one go.
8. Improve your credit record
Get a copy of your credit record from one of three credit reference agencies, including: CallCredit, Equifax and Experian online or by applying through the post. Make sure all your details are correct and close down any unnecessary accounts. Also make sure all your address details from the past six years are recorded and that you are on the electoral roll at your current address. Banks and building societies will be unlikely to lend money to anyone with an imperfect credit history.
9. Think before you borrow
Fees charged by lenders can run into thousands of pounds and often the best mortgage rates carry the heaviest fees. Look at the total cost of the deals you are considering and don´t be afraid to ask questions. When you calculate the cost of remortgaging, add in all legal fees and early exit fees so you can work out if it is worthwhile.
10. Make your mind up
Good mortgage deals disappear quickly, so make your mind up as soon as possible, once you have digested all the information. Lenders will allow you to book into a new deal six months before your remortgage deadline, so you can avoid having to spend time paying the standard variable rate.
Ideally suited to debts of less than £5k with some disposable income available. Learn how to consolidate your situation and reduce your monthly payments by learning to negotiate with your creditors directly.
Designed for debts of up to £15k where creditor pressure is becoming too much to handle and you may have failed to agree to an overall acceptable monthly payment with your creditors directly.
Minimum total Debt of £15k to qualify for an IVA. Typically you can write off up to 75% of your debts and repay the balance over 5 years. This is a formal arrangement and failure to maintain it can have serious implications
If you have been refused an IVA or simply do not have any disposable income to come to an arrangement with your creditors Bankruptcy may well be your best option but professional help and advice is strongly recommended before entering into any formal arrangements.