Home
loans and Mortgages.
Finding the right home loan and the right financial
institution to deal with is a major decision.
It pays to do your research
before committing to anything as you will be paying off your loan
for many years to come.
There is a variety of different
home loan products and services and in there is plenty of choice
as well. In the USA there are now thousands of mortgage brokering
firms who operate independently of the banks.
These firms basically get paid
commission on the loans or mortgages they sign up or organize, but
the point is they have access to most if not all the big banks loan
products.
Who
to deal with.
It`s important to know
that there are differences between mortgage brokers and bank loans
officers.
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Bank
Loans Officers - The loan officers at the
bank or other lending institutions are employees who work
to sell and process mortgages and other loans originated by
their employer.
They often have
a variety of loan types to choose from, but all loan types
originate from the one lending institution.
The loans officer
accepts your application and seeks out a home loan to suit
your needs.
On approval of
your personal credit, the loans officer moves forward to process
the purchase.
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Mortgage
Brokers -Mortgage brokers are professionals who
are paid a fee to bring together lenders and borrowers. They usually
work with dozens of lenders, not as employees, but as freelance
agents.
The mortgage broker
can be looked upon as a scout.They find and evaluate home buyers,
analyzing each applicants credit situation to determine which lender
is the best fit for that clients needs.
The broker then submits
the home buyer`s application to one or more lenders in order to
sell it, and then works with the chosen lender until the loan closes.
A good mortgage broker
can find a lender for almost any type of credit. The mortgage broker
working to secure your loan is earning a fee for the transaction.
Also, mortgage brokers
can often find a lender who will approve loans that a bank refuses.
If
you are a first time home buyer it can be really scary, first time
home buyers read more....
How
much to borrow.
The first step is to
work out how much you can borrow, the next step is to work out how
much it is safe to borrow.
This is a big Point,
please remember don't over commit with how much you borrow, just
because that's what you are offered.
Getting back to what
the broker will ask, they will look at your income and all expenses,
debts, regular bills to work out how much you can put towards a
home loan. Most lenders will base the size of your home loan on
your capacity to meet the monthly repayments. Repayments should
not exceed 30% of your pre tax income.
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Home loan advice no. 1. Be prepared to shop around.
There is a variety
of different home loan products and shopping around is essential.
Finding the right
loan will save you a lots of money over the length of the
loan, remembering that these agreements on average last 20
years or more.
Major points
include for home loans:
* interest rates
* Monthly fees
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* Flexibility
in repayments
* Redraw facilities
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* Owner/occupiers
only loans
* Investment
only loans |
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Home loan, mortgage advice no. 2. Deal with a local.
My recommendation is that you
deal with a broker instead of going directly to the bank ,at least
that way you have a local point of contact for how your loan is
progressing.
Dealing with a firm
where you only can go through a call centre can be a pain in the
backside.
When you are stressing
about how long before you actually receive your loan approval you
don’t want to be put through to some call centre in hundreds of
miles away, and be treated like a number. If you are able to work
with your own local broker makes a lot more more sense and is a
lot easier.
Selling
real estate, be prepared when selling real estate, read more....
Home loan, mortgage advice no. 3. Use the internet to your advantage.
I know it sounds obvious
but some times we miss the obvious.
The home loans
marketplace is a competitive area so some of the lenders will
offer substantial incentives to get your business.
Even before speaking
to your local broker use the internet to gain some knowledge on
the home loans marketplace. It is a competitive area and some of
the lenders will offer substantial incentives to get your business.
Finding the right
loan will save you a lots of money over the length of the loan,
remembering that these agreements on average last 20 years or more.
Buying
real estate, basic rules to follow buying real estate, read more...
Home
loan, mortgage advice no. 4. What you will need, how much
down payment.
For most lenders,
a minimum of 5% of the purchase price is required as a deposit.
However, the more money you can save for your deposit the
better off you'll be.
Repayments will be reduced and you'll save money over the
life of your loan. Most banks will require proof of savings
history in the form of bank statements that show regular deposits. |
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Home
loan, mortgage advice no. 5. How much to borrow
Big Point here please
remember don’t over commit with how much you borrow, just
because you are offered it.
The banks are in the serious profits business!
They have hungry shareholders to feed. What ever the bank offers
you don’t forget it’s a loan which has to be repaid with interest.
Did you know that
the origin of the word mortgage has French background which
roughly translates as "an agreement until death"?
Now that doesn't paint a very pretty picture does it.
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Home loan, mortgage advice no. 6. Get loan pre-approved
Getting your home loan
pre approved should be part of your game plan.
What this means is
your broker/financer will assess you and any other applicants and
establish your borrowing capacity, prior to you finding your property.
That way you can go real estate shopping with realistic expectations
and a genuine ability to purchase
Looking at
Property
Having your home loan pre-approved gives you a head start because
the realtors will take you more seriously.
If it’s your first real
estate purchase it’s a good idea to not fall in love with anything
until they give you the keys and tell you it’s yours.
Nearly everybody has
a tale to tell how they got beaten at the post when buying real
estate.
Real estate
insurance, protect your most valuable asset, house insurance, read more....
If
you are putting your property on the market read our tips on preparing your house for sale, read more...
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