Mortgage Project

If you are planning to get a mortgage, then you should make sure that you avoid a number of common mistakes that will leave you paying too much money or getting into financial difficulties. If you are aware of potential mistakes you can make then you will be better equipped to get the best deal for your needs. Here are the most common mortgage mistakes and how to avoid them:

Not sorting out your finances

If you try and get a mortgage before you have sorted your finances out, you could find yourself getting a rough deal or even being rejected for a mortgage. If you are rejected for a mortgage it can harm your chances of getting one from elsewhere. Before looking at mortgages, get all of your finances in order and have all your paperwork ready to submit to mortgage lenders. Also, get hold of your credit report and make sure that all the information on it is correct. If there are mistakes on your credit report it could harm your chances of getting a good mortgage.

Looking for a house without pre-approval

Many people make the mistake of looking at property without having any idea whether they can secure a mortgage to pay for it. The most common mistake people mistake is confusing ‘pre-qualified’ with ‘pre-approved’. Pre-qualification is a very initial estimation of how much you can borrow, and there is no guarantees you will get this amount at the rate you want. Pre-approval means that you go through the credit checking process and the lender agrees in writing to give you a certain amount of money. Getting pre-approval gives you a budget and makes you much more attractive to sellers because you have the finance already in place.

Borrowing too much

Perhaps the biggest mistake people make is to borrow too much money. This can come about through a combination of not being honest with yourself and pressure from lenders. If you are not honest with yourself about how much you can afford then you will end up in financial difficulty. You shouldn’t be tempted by lenders who offer you overly generous mortgages because it is you who will pay the price if you cannot keep up with the repayments. Work out how much you can comfortably afford to pay each month and stick to this budget.

Not shopping around

It is quite easy to get hold of a mortgage, but if you want a good deal you have to shop around. If you find a good deal, you shouldn’t automatically think it is the best deal you can get. Many companies offer amazing deals that turn out to be a lot more expensive than initially advertised. Do your research and find out what someone with your credit rating should be paying on average for a mortgage. If you do this then you will end up with a much better price.

Paying for things you don’t need

With a lot of mortgages you will be offered extra items and pay extra fees that are simply unnecessary. Although they might seem a small amount here and there, they can soon add up and you could end up paying a lot more than you need to. Make sure that your mortgage agreement only includes the items that you need, and query the price of any fees you think are too expensive. If a company tries to charge you too much then walk away. Remember, there are always other providers for you. If you are careful and avoid common mortgage mistakes then you will get a great deal and remain financially stable.

For additional articles and an extensive resource for everything about credit cards and finance, please visit us at Credit Cards and Mortgages
Visit http://www.creditcards-gb.co.uk

Share This

Previously, in the UK, if you wanted to apply for a mortgage to buy a new home, the amount that would be lent to you would be automatically tied to how much money you earned. With runaway UK housing prices over the last decade, and with incomes remaining fairly stable, this method of calculating how much you could borrow on a mortgage has become out dated. Today, many new home buyers need to look for more creative ways to borrow money if they want to buy a new home in Britain.

The Affordable Mortgage

Probably the most common of the new forms of mortgage is the affordable mortgage. Unlike mortgage that fixed to your earnings, affordable mortgages are calculated based on how much you can afford to repay each month once you have taken into consideration all of your other expenses. So, for example, if you have recently bought a new car on hire purchase and will be making hire purchase payments for the next three years, these hire purchase payments will be deducted from your salary and what remains will determine whether or not you can afford to repay the mortgage loan. UK affordable mortgage loans have allowed new home buyers to borrow as much as 50 percent of their monthly disposable income in mortgage repayments, which usually gives new home buyers a much better chance of buying a new home.

The Flexible Repayment Mortgage

Growing in popularity is the flexible repayment mortgage. As mentioned, traditional mortgages take into account what you current earnings are, how much you borrow, the interest rate, and then calculates, roughly, a monthly repayment that will be fixed (variable on interest) for the remaining 20 to 30 years of the mortgage term. Real life, however, is not like that. It is highly unlikely that you’ll be earning the same in 10 years time as you earn today. A flexible repayment mortgage takes this into consideration. It allows you increase your mortgage repayments over time. As such, within parameters, you are able to borrow more on your UK mortgage than you earn today on the expectation you’ll be earning more in the future.

The Current Account Mortgage

Strictly speaking, the current account mortgage is not a mortgage at all - it’s an overdraft. As such, it is not restricted by the same lending ratio limits that traditionally apply when applying for a UK mortgage. Nonetheless, so long as you are financially disciplined enough not to be overly concerned with having to live with a large overdraft on a daily basis, this type of new UK home mortgage can mean the difference between being able to buy a house now and having to wait until you have enough of a deposit or a high enough salary to qualify for a traditional UK mortgage.

The world of UK consumer finance is forever evolving. To try and respond to recent demographic changes in the UK, and to ever rising costs of living in the UK, UK credit lenders are having to be more and more ingenious when it comes to obtaining new business. As such, if you find yourself in the position where you simply cannot afford to buy a new home on your current salary, don’t give up, look around and see if you can find a UK home lender who’ll agree to lend you the money to buy your new dream home on more flexible terms and conditions than was previously the case.

Joseph Kenny writes for the Loans Store where you can compare loans for UK residents and apply for a secured loan if you have a bad credit history.

Visit Today: http://www.ukpersonalloanstore.co.uk

Share This

Are you feeling overwhelmed with the sheer number of different types of mortgage loans? Not sure which one will work best for your situation and needs? Read on for tips to help you compare the advantages and disadvantages to the most common types of mortgage loans.

First, it is important to understand the difference between a variable or adjustable interest rate mortgage and a fixed rate mortgage. With a fixed rate mortgage you gain the advantage of monthly mortgage payments that do not change; however, your interest rate may be slightly higher than what is offered with an ARM. With an adjustable rate mortgage while you will typically have a lower introductory interest rate, that rate may fluctuate over the duration of your loan. This can mean your monthly mortgage payments may become higher or lower, depending on whether interest rates are raised or lowered.

Beyond adjustable rate mortgages and fixed rate mortgages you also have other options in terms of how long you finance your home. The most common terms are 15, 25, 30, 40 and now even 50 year mortgages in some areas. Keep in mind the longer you finance your mortgage the less your payments will be per month but the more you will pay in interest over the duration of the loan.

There are also special types of loans offered which may offer certain advantages. These types of mortgages include FHA and VA home loans. A FHA home loan is often attractive to first time home buyers because it allows the purchase of a home with a lower down payment, in some cases as low as 3%. There are certain qualification regulations in order to be approved for a FHA home loan; however. You must have good credit history and enough income to cover the loan and your other financial obligations. Typically, all of your housing costs each month, including house note, property taxes and insurance cannot exceed 29% of your gross monthly income. In addition, your housing costs plus your other monthly long-term debt should not exceed 41% of your gross monthly income.

VA loans are made available to veterans of the U.S. armed services for the purchase of homes. With this type of loan you can purchase a single family home, condo, new construction or even a manufactured home. You should be aware that you’ll usually need to pay a 2% fee when the loan is closed. One of the best advantages to this type of loan is that 100% financing is available. In addition, you don’t have to worry about private mortgage insurance, which is required in certain cases when you are financing more than 80% of the home’s value. You may also be able to take advantage of a competitive interest rate.

Other options include balloon mortgages and hybrid mortgages. With a balloon mortgage you may be able to lower your monthly payments by agreeing to pay a portion of the mortgage in a lump sum at the end of the mortgage. The disadvantage to this is that you will have to come up with the money or try to extend the loan; which may or may not be available.

With a hybrid loan you can sometimes take advantage of a lower interest rate in the beginning of your mortgage, perhaps for three to five years, when you may be struggling more to make the payments. After this time period has passed, the interest rate will rise and you will be responsible for a higher monthly mortgage.

Joseph Kenny writes for the Loans Store who can offer cheap loans to UK residents and secured loans if you have a poor credit history.
Visit Today: http://www.ukpersonalloanstore.co.uk

Share This