Here are some handy tips related to getting a basic mortgage:
Before you fill out mortgage applications, take whatever steps you can to improve your credit score. Pay off old loans or other debts, and once they are paid off, ask your creditors to remove negative information from your credit report. If you need new, positive credit ratings, get a department store credit card, make a few charges on it, and pay them off promptly.
TIP: Overpay your mortgage if you can do so without penalty, especially if your financial product payments are re calculated week to week or month to month. This means you will incur much less interest over time, and get peace of mind sooner. Get your outstanding mortgage loan amount down, and get on with the fun things in life.
Your best way to find a sub prime lender is to search on the internet. The world wide web allows you to find and compare multiple providers so you can get the best rate for you. You ll be surprised at the deals on offer. It depends on what kind of a credit risk you are. There are mortgages available, even to people with bad credit.
A credit broker gets a lot of calls from people whose credit is bad, or who have CCJs (County Court Judgements) against their name. What can you do if this is the case?
Well, you can try to erase or ameliorate these black marks. First you check what a provider might find out about you, when they do a credit check. Go to Experian and Equifax. Order your credit report from BOTH sites, as there may be disparate entries in each. Make sure you give the same name and address as you normally have on your bills. If you moved recently (in the past two years), give your old address as well. You re dealing with a bureaucracy, and big computerised databases. They can only find what you tell them; if you give incorrect information, you may not get the full picture.
You can also apply to the County Court to satisfy outstanding judgements against you, and have this entered in their records; it ll still count as a mark against you, but it will be more of a dark grey instead.
TIP: Don t take out a Mortgage Indemnity Guarantee (MIG) if you can avoid it MIGs are now generally only charged on loans of 90 to value. A MIG is a one off payment made to the corporation that protects them if you fail to keep up your repayments and your property is repossessed. If you can avoid paying for one, do, it will save you some money.
What about closing costs? This depends on how long you intend to keep the property and then calculating which rate option is the most agreeable. By accepting a higher interest rate on a 30 year fixed with zero closing costs, will it cost less than paying closing costs for the same period fixed with a lower rate in the time you will keep the place?
Implement a budget. Look at where your lolly is going. There should be more money coming in than going out. Track and record your spending habits over at least a month. Write down everything you spend. Examine your spending habits and see what you can do without. By having a monthly financial plan, you know how much you need to spend on groceries, bills, debts etc. By doing so, you can pay additional amount of cash to reduce your debt.
Work on your credit. Spend a year or two making sure all your payments get in on time. Stop applying for new credit. Reduce the balance on your current debts. Because interest rates are already rising, you can t afford to lock in at a penalty rate. An additional year before buying could save you tens of thousands over the life of the quality mortgage.
Build a sizable deposit of 20 per cent or more. This allows you to direct negotiations with lending agents. Not only will you save on insurance and your interest rate, you ll also have pre established home equity.
Watch out for fly by night mortgage lending agents closing their doors and selling their low quality mortgages on the secondary market. You want a lending agent that s going to give you good client service and do so for thirty years. Look for one whose personnel answer questions, doesn t try to rush you and is genuinely interested in helping you.
Keep in mind that there are many financial product lenders out there, and each one of these companies may offer unique deals. |
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