All You Need To Know About Finding The Perfect Mortgage Loan!

| October 27, 2015 | 0 Comments

Getting a mortgage loan is a popular method of buying a house. But, how do you find the perfect mortgage? Here are some tips to help you do just that:

Get Your Credit In Good Shape

If you want to find the perfect mortgage, you need a good credit rating. All mortgage lenders will check your credit when you apply for a loan. If your score is very low, they may not approve the loan. Likewise, if it’s below average, they may not give you what you want. Make sure you check your credit rating before you apply. If you notice that it’s not looking great, your priority should be improving it. Do everything you can to get your rating up and into a good position. The more positive your credit rating, the bigger loan they’ll approve for you.

mortgage-keyboard

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Consider The Different Mortgage Loan Types

Many people think that there is only one type of mortgage. So, when they go to apply for a mortgage, they’re shocked to find there are many different types. There’s an ongoing mortgage battle between FHA vs. conventional loans. More specifically, which is better? An FHA loan is a mortgage insured by the federal government. They are only supplied by FHA approved companies. Whereas a conventional loan is any mortgage not insured by the government. It’s thought that FHA loans offer lower interest rates with less of a deposit required too. But, many lenders prefer to offer conventional loans because they’re quicker to process. If you need your mortgage pronto, conventional could be better for you. Do your research and consider which one is best suited to your needs and finances.

Look At The Interest Rates

No matter what type of mortgage you get, you should always look at the interest rates. Naturally, you don’t want a mortgage with very high-interest rates. This could end up costing you a tonne of money throughout your life. Two of the best options are either fixed-rate or standard variable rate (SVR). A fixed-rate is good because the interest stays the same over the years. So, you’ll always be paying the same amount every time you’re due to make repayments. It may be easier for some people to handle as they can manage their money around the repayment sums. Also, there’s no risk of interest increasing. However, some prefer SVRs for a couple of reasons. Firstly, the interest rates could drop, meaning you pay less! Secondly, you may be able to find them for cheaper than fixed-term. Fixed-term mortgages may have a slightly higher interest rate set because it will be fixed.

 

So, you have to decide whether you want a mortgage where the interest is set and you know exactly how much you have to pay back. Or, whether you’d prefer to take the risk with a cheaper option where the rates may fall even lower, but could rise higher. Sit down with your partner and think about which one would be best for you. It may also make sense to find a financial advisor to weigh in on this decision. They can analyse your finances and see which would suit you best.

 

Category: Home Loan

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