Mortgage Comparison: Comparison Shopping for the Best Mortgage Loan
Before you sign a mortgage contract you need to read the entire document and pay attention to several key elements. Here is what you need to look for. Has the lender included a prepayment penalty in the contract? This is one of the first things you should look for. Lenders charge prepayment penalties if you sell your home or refinance the mortgage before a specified time. Do not accept a mortgage comparison offer with a prepayment penalty if you can avoid it. Most items on your loan contract are subject to negotiation so insist that your lender remove the prepayment penalty. If you have bad credit you may be stuck with it; however, you may be able to negotiate more favorable terms on the penalty.
What interest rate will the lender guarantee in writing, and when does it expire? Mortgage lenders grant lock periods to their customers. As long as you close prior to the expiration of the lock, your interest rate is guaranteed. If you are unable to close prior to this lock period expiring, for whatever reason, the lender can change the interest rate. You can negotiate for a lower interest rate by prepaying points or increasing the amount of your down payment.
Look for signs of predatory lending practices. To avoid being taken advantage of by a mortgage broker or lender you need to familiarize yourself with predatory lending practices. Is your lender or broker using pressure sales tactics on you? Are they over promising loan conditions? Be on the lookout for periodic refinancing requirements, balloon payments, or lenders that require you to purchase additional services as a condition of the loan.
Flexible Buy to Let Mortgages- With a flexible mortgage, many lenders will allow you to make overpayments. This can be used to plan the early repayment of a mortgage. You can usually ‘re-draw’ the overpayments when you want to which is particularly helpful when it comes to redecorating your property of for repairs. Minimal Status- Just because you can’t prove a high level of income doesn’t mean you are a bad credit risk! Many of our lenders recognise this, for example; you may have been made redundant and have sufficient capital to live off. Alternatively your partner/spouse may have a substantial income and the finance/property may be far more efficiently placed in your name for tax reasons. Another reason maybe that you are simply unable to prove (by normal means) your true income position.
Overseas Mortgages- British mortgage lenders are often reluctant to provide mortgages to people who do not live or work in the UK. This is because their mortgage approval systems are designed towards information received from the UK Credit Reference Agencies and the lenders reliance on applicants having a provable UK source of income.
Learn more about Obama Mortgage Relief Plan Qualifications
