Category: Mortgage

Credit Score

A loan applicant’s credit score is one of the most important parameters any financial institution considers. A healthy credit score might qualify you for relatively lower interest rates. On the other hand, poor scores make banks see you as a high-risk investment, which might significantly increase their interest rates. Therefore, it is important to ensure that you work on your credit score before you start looking for a home loan.

Loan Amount

The amount of loan you need also affects the interest rates. Small low amounts often attract lower interest rates than massive six-figure loans. This disparity can be explained by the risk associated with high loan values. Therefore if you want to purchase an expensive home and still keep the interest rates at a manageable level, it is advisable to pay a larger down payment.

Type of Interest Rate

Home loans have three different types of interest rates – floating, fixed, and mixed. Floating interest rates are determined by the prevailing market scenario, which means that your interest might reduce or increase. These loans tend to be cheaper than the fixed type, only that it might be difficult to budget. Just as the name suggests, fixed home loans require you to pay a certain amount over the entire course of your loan. On the other hand, mixed loans are subject to fixed and variable interest rates during specified loan periods.

It is important to pay attention to these parameters when scouting for a home loan. You should also be ready to do anything that is within your means to see that you get favorable interest rates.

A home is probably going to be the biggest purchase you will ever make, and there’s a chance that you won’t be able to pay upfront in cash. Like most people, you will need to get a mortgage. Mortgage shopping can be hectic, even when interest rates seem to be relatively low.

Getting a mortgage broker who are professional, experienced, reputable, reliable, and licensed could save you the time and money you spend shopping around, comparing, asking questions, and negotiating. If you are purchasing property, here are the reasons as to why you should contact a mortgage broker.

Saves You Time

A mortgage broker does all the legwork when it comes to paperwork and negotiations with the lender. In addition, they can help you get pre-approval for the mortgage. If you end up having a good relationship, they can also be your personal contact for all your financing needs in the future. All this saves you the time you can spend doing other productive things.

Does All The Legwork

A mortgage broker can help in doing all the legwork. For instance, he/she can assit you in finding you the right mortgage for your needs and accord you the necessary support you need through the application and settlement process which includes identifying affordable rates, sourcing preapproval, doing all the paperwork, helping you apply for incentives or grants where applicable and updating you on the application progress.

Lower Interest Rates

Mortgage brokers have vast experience in shopping around and negotiating for the best deals on your mortgage. They also have a good pre-existing relationship with most lenders, which works best for you by giving them access to good rates, which are at times not advertised widely. You end up getting the best payment plan and the best interest rate the market has to offer. Remember that even the slightest difference in interest rates has a huge impact on the total payable amount you will pay the lender over the years.

It is good to do your own research to identify the average mortgage rates in the market so as to ascertain whether the deal you are being offered is better.

Saves You Some Fees

Taking a new mortgage involves fees such as origination, application, and appraisal fees. Some mortgage brokers are able to get lenders to waive some or all these fees, which saves your money. With the financial strain that is associated with buying a property, you should take advantage of every opportunity you get to save cash.

Accessibility

Some lenders only work with brokers, which limits accessibility. Even in cases where you have direct access, it may be hard for you to reach mortgage brokers. Due to an existing good relationship, the brokers are able to access the lenders faster, and they also get better rates due to the business volumes they bring.

Using a mortgage broker when buying property is a good way of getting a good deal without spending much time and money shopping around and a mortgage tailored for your needs.

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