Mortgage Advice
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Top Ways To Save Lots Of Money On Your Mortgage!
For most people, a mortgage represents their deepest financial commitment, yet many do not take a few moments to pull up a plan in order to slash their mortgage costs. That's a shame, because thousands of people could significantly reduce their mortgage commitments by following the below advice:
(1) Understand What Type Of Mortgage Is Best For You - The type of person you are, the nature of your occupation and your future plans could have a huge impact on what mortgage may be best (and cheapest) for you. For example, if you're on a very tight budget then a fixed mortgage may well be best, but if you have a bit of cash available then a recent new type of mortgage called an "offset" can save you hundreds a month. With an offset mortgage your savings and mortgage are set against each other - so if you owe $100,000 but have $30,000 in cash you only pay interest on the $70,000. This is usually a tax efficient way of saving on your mortgage.
(2) Make Small Payments Regularly To Smash Down The Value Of Your Mortgage - Depending on the type of mortgage you currently have (and assuming you do not get penalised for it), you could make small additional payments onto your mortgage. Even as little as $50 extra toward your mortgage per month could have significant benefits in terms of the final interest amounts your mortgage costs you.
(3) Is It Time To Re-mortgage? The mortgage industry is a highly competitive one. Many lenders are now offering good deals to steal business from their rivals. You may find that by switching your mortgage to a new lender you're able to save thousands of dollars (or you may receive a cash incentive to switch). You must make sure you're not breaking any rules of your current mortgage term or you may well offset any potential gains in penalties.
(4) Challenge Late Penalties - if you have been late on a payment, some banks can charge a stiff penalty for this. Sometimes, you can write to the bank or call the manager and tell them there was a slight mix up with your bank account and they may be willing to reverse the fee (especially if you drop a hint about going elsewhere).
(5) "Buy Off Season Mortgages" - If you buy at times when the mortgage industry is at it's cyclical low, you'll find they often try and have special deals at these times. This can be a great way of getting your mortgage at the lowest possible rate.
(6) Fix Your Credit - Make sure your credit is as good as it could be before applying for your mortgage. The higher risk you are, the more you'll have to face if you have existing arrears.
These are simple yet highly effective tips to ensure your mortgage is the lowest it possibly could be.
Visit our site for more Essential Mortgage Advice
(1) Understand What Type Of Mortgage Is Best For You - The type of person you are, the nature of your occupation and your future plans could have a huge impact on what mortgage may be best (and cheapest) for you. For example, if you're on a very tight budget then a fixed mortgage may well be best, but if you have a bit of cash available then a recent new type of mortgage called an "offset" can save you hundreds a month. With an offset mortgage your savings and mortgage are set against each other - so if you owe $100,000 but have $30,000 in cash you only pay interest on the $70,000. This is usually a tax efficient way of saving on your mortgage.
(2) Make Small Payments Regularly To Smash Down The Value Of Your Mortgage - Depending on the type of mortgage you currently have (and assuming you do not get penalised for it), you could make small additional payments onto your mortgage. Even as little as $50 extra toward your mortgage per month could have significant benefits in terms of the final interest amounts your mortgage costs you.
(3) Is It Time To Re-mortgage? The mortgage industry is a highly competitive one. Many lenders are now offering good deals to steal business from their rivals. You may find that by switching your mortgage to a new lender you're able to save thousands of dollars (or you may receive a cash incentive to switch). You must make sure you're not breaking any rules of your current mortgage term or you may well offset any potential gains in penalties.
(4) Challenge Late Penalties - if you have been late on a payment, some banks can charge a stiff penalty for this. Sometimes, you can write to the bank or call the manager and tell them there was a slight mix up with your bank account and they may be willing to reverse the fee (especially if you drop a hint about going elsewhere).
(5) "Buy Off Season Mortgages" - If you buy at times when the mortgage industry is at it's cyclical low, you'll find they often try and have special deals at these times. This can be a great way of getting your mortgage at the lowest possible rate.
(6) Fix Your Credit - Make sure your credit is as good as it could be before applying for your mortgage. The higher risk you are, the more you'll have to face if you have existing arrears.
These are simple yet highly effective tips to ensure your mortgage is the lowest it possibly could be.
Visit our site for more Essential Mortgage Advice
Types Of Mortgages
Mortgages are a multi-billion dollar a year industry and there are different mortgages now available to suit a wide variety of needs and situations. No matter what your circumstances, you'll probably find a mortgage that suits you.
Here, we'll look at the various different types of mortgages that are widely available in the market:
Before starting you should know that most mortgages fall into two distinct categories - repayment and interest only. With the first, your monthly payments include repayment of the loan amount plus the interest. With interest only mortgages only the interest is covered and the person arranges to make the actual loan repayment independently.
Here's some more information about the different types of mortgages available:
Fixed Rate Mortgages - with the fixed rate mortgage your rate is steady for a certain number of years. The good thing about fixed mortgages is that you know exactly what your payments will be for the fixed period. This works well for those on a strict budget who need to know exactly what will be payable month after month. The downside to fixed rates is that if the interest rate falls you continue to pay the higher rate. Of course, on the flip side, interest rates might rise which means your rate stays at the fixed level.
Usually, fixed rate mortgages come with strict penalties should the borrower wish to end the term early.
Variable Rate Mortgages - Variable rates are linked to the underlying base rate of interest. As the underlying interest rates rise, so will your underlying variable rate. Variable rates are usually popular in economic cycles where the rate is generally headed lower. Of course, you can never tell for sure what the rate will do so there is a certain element of risk attached with variable rate mortgages.
Capped Mortgages - Capped mortgages are supposed to offer the best of both worlds. They impose a "cap" on the maximum interest rate you'll ever pay and so offers a security - so if rates fall so do your repayments, but rates can only rise to the value of your cap. On the surface the capped mortgage appears to be ideal - but dig a little deeper and you'll see that the number of cap rate mortgages offering competitive rates are somewhat limited.
Discounted Mortgage Deals - Sometimes, mortgage providers offer new clients "discounted rates" - these are rates that are lower than their standard variable rates and they last for a certain period. After the period the mortgage switches to the standard variable rate. This can be a good option but you'll need to check that the rate it switches to is competitive.
100% Mortgages - This is a mortgage where the borrower does not pay any deposit. With other mortgage types, the borrower needs to put some money down, but with 100% Mortgages, this is not required. This is a good option if you're unable to find money for a deposit but beware - 100% mortgages tend to be far more expensive than other mortgage types. You may also find that most of these mortgage types tie you in for longer periods (never a good thing) and you may be required to sign up to a mortgage indemnity policy (again, not a good thing).
Buy To Let Mortgages - Many people are discovering that they can increase their net worth quickly by acquiring "buy to let" properties. There are now specific buy to let mortgages that help people who want to let out their properties for investment purposes. These tend to be different to standard mortgages.
Bad Credit Mortgages - There are even mortgages available that cater to people who have bad credit.
Other Mortgage Types - Believe it or not we've only covered a sample of the mortgage deal types out there. There are many other very specific mortgages from self certification mortgages to offset mortgages that may cover you if the standard ones do not apply.
Visit our site for more Essential Mortgage Advice
Here, we'll look at the various different types of mortgages that are widely available in the market:
Before starting you should know that most mortgages fall into two distinct categories - repayment and interest only. With the first, your monthly payments include repayment of the loan amount plus the interest. With interest only mortgages only the interest is covered and the person arranges to make the actual loan repayment independently.
Here's some more information about the different types of mortgages available:
Fixed Rate Mortgages - with the fixed rate mortgage your rate is steady for a certain number of years. The good thing about fixed mortgages is that you know exactly what your payments will be for the fixed period. This works well for those on a strict budget who need to know exactly what will be payable month after month. The downside to fixed rates is that if the interest rate falls you continue to pay the higher rate. Of course, on the flip side, interest rates might rise which means your rate stays at the fixed level.
Usually, fixed rate mortgages come with strict penalties should the borrower wish to end the term early.
Variable Rate Mortgages - Variable rates are linked to the underlying base rate of interest. As the underlying interest rates rise, so will your underlying variable rate. Variable rates are usually popular in economic cycles where the rate is generally headed lower. Of course, you can never tell for sure what the rate will do so there is a certain element of risk attached with variable rate mortgages.
Capped Mortgages - Capped mortgages are supposed to offer the best of both worlds. They impose a "cap" on the maximum interest rate you'll ever pay and so offers a security - so if rates fall so do your repayments, but rates can only rise to the value of your cap. On the surface the capped mortgage appears to be ideal - but dig a little deeper and you'll see that the number of cap rate mortgages offering competitive rates are somewhat limited.
Discounted Mortgage Deals - Sometimes, mortgage providers offer new clients "discounted rates" - these are rates that are lower than their standard variable rates and they last for a certain period. After the period the mortgage switches to the standard variable rate. This can be a good option but you'll need to check that the rate it switches to is competitive.
100% Mortgages - This is a mortgage where the borrower does not pay any deposit. With other mortgage types, the borrower needs to put some money down, but with 100% Mortgages, this is not required. This is a good option if you're unable to find money for a deposit but beware - 100% mortgages tend to be far more expensive than other mortgage types. You may also find that most of these mortgage types tie you in for longer periods (never a good thing) and you may be required to sign up to a mortgage indemnity policy (again, not a good thing).
Buy To Let Mortgages - Many people are discovering that they can increase their net worth quickly by acquiring "buy to let" properties. There are now specific buy to let mortgages that help people who want to let out their properties for investment purposes. These tend to be different to standard mortgages.
Bad Credit Mortgages - There are even mortgages available that cater to people who have bad credit.
Other Mortgage Types - Believe it or not we've only covered a sample of the mortgage deal types out there. There are many other very specific mortgages from self certification mortgages to offset mortgages that may cover you if the standard ones do not apply.
Visit our site for more Essential Mortgage Advice
Protect Yourself from Mortgage Fraud
It's hard to believe, but there are people out there looking to prey on people's ignorance when it comes to buying property. The mortgage fraud game is larger than you think, and every year, thousands of people fall victim to over-appraised properties, higher than normal interest rates, and loan amounts that are way more than their budget allows. How do you know if you're being hustled? It's not as cut and dry as you might think, but here are some tips to help you see through the charade.
The first tip is to trust your gut. For this scam to be pulled off, you're going to have to deal with a crooked real estate agent who points you to a piece of property, than an appraiser who will over-value the property, and then a bank officer who will validate that price. With all these dishonest people floating around, your gut should tell you something is wrong at some point. Keep your eyes open and if something starts to smell fishy (like the land they are trying to make you buy) than start asking questions.
Keep an eye out for scams like these targeting the elderly. They tend to be more trustworthy than younger people, and tend to take people at their word. These scams have also been known to target first-time buyers who don't know how transactions like these are suppose to go. Also, if you live in Illinois, Florida, California, Nevada or Arizona than you're more likely to run into one of these shysters.
So, how to protect yourself? Here are some warning signs to look for. If your real estate broker demands that you use a particular lender (i.e. the lender that's in on the scam), just say no. Tell your broker that you'll use whatever lender you want and that you've shopped around and you've chosen a different one. If your broker or agent gets a little testy at this, you might want to consider dumping them.
Another good sign that you're dealing with less than honest people is that your lender is trying to talk you into borrowing more than what your budget allows. This is never, ever a good idea. You should go into every discussion with your lender knowing exactly what your limits are.
This one is just common sense, but make sure you get copies of everything you sign. If you don't, demand them. Also, if you feel you've signed something less than honest, take the documents to another lender or to a lawyer to have them looked over.
Scammers have been a part of the real estate scene for as long as there has been swampland in Florida or a bridge in Brooklyn to sell. They aren't going anywhere (except maybe to prison) so you have to equip yourself with the knowledge of how to deal with them.
For more tips...visit our site for more Essential Mortgage Advice
The first tip is to trust your gut. For this scam to be pulled off, you're going to have to deal with a crooked real estate agent who points you to a piece of property, than an appraiser who will over-value the property, and then a bank officer who will validate that price. With all these dishonest people floating around, your gut should tell you something is wrong at some point. Keep your eyes open and if something starts to smell fishy (like the land they are trying to make you buy) than start asking questions.
Keep an eye out for scams like these targeting the elderly. They tend to be more trustworthy than younger people, and tend to take people at their word. These scams have also been known to target first-time buyers who don't know how transactions like these are suppose to go. Also, if you live in Illinois, Florida, California, Nevada or Arizona than you're more likely to run into one of these shysters.
So, how to protect yourself? Here are some warning signs to look for. If your real estate broker demands that you use a particular lender (i.e. the lender that's in on the scam), just say no. Tell your broker that you'll use whatever lender you want and that you've shopped around and you've chosen a different one. If your broker or agent gets a little testy at this, you might want to consider dumping them.
Another good sign that you're dealing with less than honest people is that your lender is trying to talk you into borrowing more than what your budget allows. This is never, ever a good idea. You should go into every discussion with your lender knowing exactly what your limits are.
This one is just common sense, but make sure you get copies of everything you sign. If you don't, demand them. Also, if you feel you've signed something less than honest, take the documents to another lender or to a lawyer to have them looked over.
Scammers have been a part of the real estate scene for as long as there has been swampland in Florida or a bridge in Brooklyn to sell. They aren't going anywhere (except maybe to prison) so you have to equip yourself with the knowledge of how to deal with them.
For more tips...visit our site for more Essential Mortgage Advice
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bitsdawg
Jun 27, 2008 @ 8:51 am | delete
- Wow. You have done a lot of hard work.
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KeithBak
Jan 30, 2008 @ 12:20 pm | delete
- Very comprehensive information on mortgages. Great lens!
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