Last article we covered the basics of what a mortgage is and how it gets paid. This article reflects on leaving our previous article behind and gives you tips on what you need to know about your mortgage, how to know if you are a good candidate for a mortgage, and the different types of mortgage. You can read part 2 and find out more about mortgage types and lending conditions.
It seems that the more we learn about mortgages the more confusing they get. And guess what – it is, if your not the only thing we learn. Not to mention that every mortgage is different. So the more we learn about the mortgage the more we can learn!
A mortgage is simply a loan to purchase or refinance a property; where the loan is secured against the property itself. This sort of loan can be really useful when it is used correctly, because it is a way of cutting costs. It is very rare, however, that a mortgage pays off evenly and to that extent pay it off completely.
Many mortgages attach to a we buy houses property the actual home itself; so that when the property is sold the method of re-sale guarantees the mortgage. If you have an unusual property many lenders will have normal methods of applying to a mortgage, but yet others will require a ‘thanks the buyer’ letter and to be issued with a redemption statement, in order to cater for shortfalls that occur during the mortgage.
Everything is in black and white in mortgages. So it is up to you to decide your own ‘credit profile’.
The first time you make advance payments over your mortgage your credit score goes up instantly. This is an immediate indicator that you are a better credit risk and so the lender will not re-charge you for the debt (unless you default on your payment to that lender. Only after the debt has actually been paid will the lender draw a commission.
Self-employed, or individuals with an irregular income, must declare their earnings and in the case of annuities need to furnish their income tax documents. A good solicitor can help with this process.
Another fact to remember with mortgage applications is that, although the lower number, the higher repayment costs, so with this type of mortgage you will be paying a higher interest rate for repayments on your mortgage than those that have a conventional mortgage; this is because of the risk Hyde Park is taking when he basically lends to you a large sum of money.
The situation on the whole is that you must be careful here and shop around. With the increase in the availability of more mortgages, the competition amongst lenders is becoming more exciting than it used to be in the past. So don’t just sign up with the first mortgage company you find on the phone, check them through the internet, make sure they take exceptional care of their customers and that they are known as a professional and reputable business. This simple exercise could save you hundreds, even thousands of pounds.
With this in mind, apply for a mortgage only with the actual lender. In the case of the first time buyer it is important to see that the mortgages on offer are attractive – this makes those deals which are overall the best and will offer the best value, which is the entire aim of this article, isn’t it? Of course it is!