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How To Get The Best Mortgage
By: John Mussi
This is a guide on how to get the best mortgage deal. Do not rush into the first
offer that is made to you even if you are in a hurry for a mortgage. Take your
time, check out what is on offer from local banks, building societies and
mortgage brokers. The more time you spend doing this will equate to greater
savings on your mortgage. Remember for most people it is something that they
will only do once, so do it right!
Shopping around for a mortgage will help you to get the best financing deal. A
mortgage—whether it's a home purchase, a refinancing, or a home equity loan—is a
product, just like a car, so the price and terms may be negotiable. You'll want
to compare all the costs involved in obtaining a mortgage. Shopping, comparing,
and negotiating may save you thousands of pounds.
Get quotes:
Different lenders may quote you different prices, so you should contact several
lenders to make sure you're getting the best price. You can also get a mortgage
through a mortgage broker. Brokers arrange transactions rather than lending
money directly; in other words, they find a lender for you. A broker's access to
several lenders can mean a wider selection of loan products from which you can
choose.
Get Costings:
Be sure to get cost information about mortgages from several lenders or brokers.
Know how much of a down payment you can afford, and find out all the costs
involved. Knowing just the amount of the monthly payment or the interest rate is
not enough.
Ask each lender and broker for a list of its current mortgage interest rates and
whether the rates being quoted are the lowest for that day or week.
Ask about the mortgage's annual percentage rate (APR). The APR takes into
account not only the interest rate but also broker fees and certain other credit
charges that you may be required to pay, expressed as a yearly rate.
A mortgage often involves many fees, such as underwriting fees, broker fees and
closing costs. Every lender or broker should be able to give you an estimate of
its fees. Many of these fees are negotiable. Some fees are paid when you apply
for a mortgage and others are paid at closing. In some cases, you can borrow the
money needed to pay these fees, but doing so will increase your loan amount and
total costs. "No cost" loans are sometimes available, but they usually involve
higher rates.
Negotiate:
Once you know what each lender has to offer, negotiate for the best deal that
you can. There's no harm in asking lenders or brokers if they can give better
terms than the original ones they quoted or than those you have found elsewhere.
Once you are satisfied with the terms you have negotiated, you may want to
obtain a written quote from the lender or broker. The quote should include the
rate that you have agreed upon and the period the quote lasts. When looking for
a mortgage, remember to shop around, to compare costs and terms, and to
negotiate for the best deal.
Don't be afraid to make lenders and brokers compete with each other for your
business by letting them know that you are shopping for the best mortgage deal.
About the Author:
John Mussi is the founder of Direct Online Loans who help UK homeowners find the
best available loans via the www.directonlineloans.co.uk website. |
