Many people are worried about the current mortgage crisis and the credit crunch. The current state of the mortgage market is that lenders are raising rates and many have closed their doors to new borrowers. Moneyfacts have said that there are 10,000 fewer mortgage deals available than there were, with almost 3,000 being withdrawn in the past month alone.

So here at MoneyTowers.com, we have put together five steps to help you survive the credit crunch with your mortgage.

1. Look Early
Many of the good, fixed rate deals are being withdrawn early – part of the problem is that there are few of these deals around, and as soon as they are offered, the lenders are swamped, forcing them to withdraw the offer. It is important not to panic, but it is worth keeping an eye on the market – both fixed and tracker – and if you see your perfect mortgage deal, see if you are able to reserve it – some lenders will allow you to reserve a mortgage deal for up to six months therefore if your current deal is coming to an end, now is the time to be looking.

2. Negotiate with your current lender
If you need to remortgage in the next few months, it is a good idea to have a chat with your current mortgage provider, particularly if you are a ‘good payer’. Your current mortgage lender may be able to offer you a ‘retention’ package if you remain with them, however don’t forget to check the deals on the rest of the market to see how your current lender’s deal stacks up.

3. Brokers
It is worth seeing a broker who can then search the market for deals for you. Brokers will also hopefully have good knowledge of which lenders are having times of high demand and are therefore taking longer than normal to process mortgage applications.

4. Save Up
Many mortgage companies are now asking for large deposits. If you are planning to move house, it is worth saving as much as you can towards a deposit as lenders are tending towards giving better deals to those who can put up 25% deposits or more. In a time when there is uncertainty over our economic future, it is also wise to cut down on expenses and try to save more money anyway.

5. Getting Help
If you find you are struggling to meet your mortgage repayments, talk to your lender before it becomes a large problem. Customers must be treated fairly by their providers, and lenders tend to look more favourably on customers who come to them and explain their problems, rather than waiting for the problems to escalate. Many lenders will have a range of options to help such as payment holiday or switching to an interest-only loan.

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