Top 10 tips to help you find a mortgage

LONDON (Reuters) - Mortgage lending is down 52 percent compared to January 2008, but that does not mean you can't still find a good deal. Here are some tips to help you find the right mortgage:

* Find as much deposit as you can

The days of the 125 percent mortgage are long gone and you will find that lenders are being extremely cautious. Some of the mortgage deals currently on offer are mouth-watering, but if you want to get your hands on one of them then chances are you will require a deposit of at least 20 percent and more likely 40 percent.

* Shop around

The rates and fees attached to mortgage deals vary between lenders so it is essential that you do your research, in particular if you are stuck on your lender's standard variable rate (SVR). Compare every aspect of a mortgage with all the others you have looked at so you know where you stand from the outset.

* Get professional advice

Instead of putting extra pressure on yourself to secure a loan, you could leave it to a professional broker. Most brokers will charge you a small fee but their expert knowledge means you could save big in the long term. Given the current climate, some brokers may be open to negotiation on their fees.

* Budget properly

Buying a property is exciting but don't allow yourself to get carried away. Think about what you can actually afford every month and remember things like council tax, utility bills and insurance. There will also be some fees to pay up-front; how are you going to pay for them and how much can you actually afford?

* Think long-term

A mortgage deal might suit you know, but what if your circumstances change? Avoid taking a mortgage that is at the absolute peak of your budget. You need to know that, whatever happens, you will be able to meet those monthly payments.

* Consider the fees

Each mortgage deal is different so make sure you are aware of all the extra costs and what they involve. For example, some fees will be required up front whereas some will just be added to your loan. You may have plans to pay back your mortgage early or to switch to another deal before the one on offer expires, but there may be restrictions on what you can do or penalties for early exit, so be sure to read the small print.

* Look past the low rate

Of course you want to secure the lowest possible rate, but ask yourself: what's the catch? You may find yourself tied in for a long period with a hefty early exit fee, or on a much higher rate after a year or two. There could be a mortgage with a slightly higher rate that could in fact save you money.

* Find your type

So what type of deal should you go for? Tracker mortgages, which rise and fall with the Bank of England's base rate, are obviously very appealing at the moment. Just remember that some lenders place a "collar" on their tracker deals, which means that their rates will not fall below a certain level. Also bear in mind that though rates are low at the moment, they will eventually go in the other direction.

If you want security then go for a fixed rate, which will remain the same for a term agreed at the outset so you will always how much your monthly payment will be.

Interest-only mortgages involve paying only the interest on your loan and no capital, which means to make money in the long-term your property will need to increase in value. Your payments will be smaller while the base rate remains low, but that should mean it is a golden opportunity to start paying off capital.

* Clean up your credit score

There might be very little you can do to wipe your slate completely clean, but getting a free credit report through an organisation such as www.experian.co.uk will allow you to make sure there is nothing against your name that should not be there. If you can, clear any balances on credit cards or store cards or any other small loans.

* Don't jump in

Taking on a mortgage is a lengthy commitment and you need to be certain that it is the right time for you. Rates should remain low for a while yet, so all those good deals are not going anywhere.