Try Not To Churn Your Mortgage

Category: Finance, Mortgages.

It s a curious fact of human nature that people will haggle over the price of an umbrella, but buy a house on a whim. We know what they can buy. 400, 000 quid is harder to grasp.

We understand small amounts of money. You can t fit it in your pocket. With this in mind, here are a few tips to review when getting a mortgage. The desire to acquire, combined with the stress of the purchase, can make people do funny things. Watch out for the Deal Of A Lifetime , the deal that seems too good to be true. When getting a fixed rate: get a written statement which details the interest rate, how long the rate is fixed for, and the conditions attached.

The company may be saving money by cutting back on their level of service. When interest rates fall: try and leave your repayments as they are. You ll repay your loan much earlier. You will therefore be paying more than the minimum each month. When rates rise again you may not have to change your payment. Try to pay off your mortgage quickly. Consider a fifteen or twenty year term.

Use a mortgage calculator with an amortization function, and see what s possible. Aim for comfortable affordability. Keep your mortgage as small as possible. You will find mortgage lenders who will stretch your qualification ratios. The qualification ratio is the ratio of your total mortgage payment to your total income. They aren t doing you a favour.

The traditional ratios are: The mortgage payment as 28% of your income. Try not to churn your mortgage. The total of your mortgage payment plus your monthly debt payments as 36% of your income. Each time you refinance you ll probably incur completion costs and non- refundable fees. Many no fee credit lines have a pre- payment penalty. Beware of prepayment penalties.

This can be very expensive if you are planning to refinance or sell your house in a few years time. One of the smartest things you can do with a mortgage is to prepay it. You don t need to sign a mortgage agreement which contains any significant prepayment penalty, if you have good credit. Don t look for a home without being pre- approved. Get a full, professional survey. You will have much more negotiating power with the vendor, and may be able to save thousands of pounds. Human beings can be perverse.

Find out the true value of your home. Happy to spend 150 grand on a house after a half- hour viewing, but be- grudge spending 500 quid finding out whether it s worth buying in the first place! Get more than one independent appraisal. Start gathering documents. Compare it with the prices of similar- sized houses for sale in the same area. Provide your mortgage company with documents in good time.

Verbal( oral) agreements are worthless. Don t let your rate lock expire! When buying or selling property, always get it in writing. There s a one in ten chance you could be paying more than you should. When you do get your mortgage, check your payments are correct- do the mathematics. Review your mortgage regularly- this, will ensure you, and possibly remortgaging pay as little as possible in interest. Finally, consider the following advice from the U.

Department of Housing and Urban Development: Be sure to read and understand everything before you sign; Refuse to sign any blank documents; Do not buy property for someone else; Do not overstate your income; Do not overstate how long you have been employed; Do not overstate your assets; Accurately report your debts; Do not change your income tax returns for any reason; Tell the whole truth about gifts; Do not list fake co- borrowers on your loan application; Be truthful about your credit problems, past and present; Be honest about your intention to occupy the house; Do not provide false supporting documents. Worth spending a little time on, to get it right! A mortgage is the biggest financial committment most of us will ever make.

Read more...

You Also Need To Explain Why You Want The Fast Remortgage - Kristy Wallin's Finance and Mortgages blog:

Generally the issue of a fast remortgage comes into play when youve missed mortgage payments and perhaps are threatened with foreclosure. The number one place to start your hunt for a fast remortgage is the Internet, where you will find several firms who can not only offer a remortgage fast, but directories who can let you do some comparison shopping for the best deal in a fast remortgage.

The Variable Rate Changes According The Standard Interest Rate - Finance and Mortgages:

If you already have a mortgage than you surely know the basic and the" tricks" for obtaining a great deal. Of course in any case professional advice should be taken before signing any mortgage.

Saving A Lot Of Money On A Mortgage Isn T All That Complicated - Finance and Mortgages:

Saving a lot of money on a mortgage isn t all that complicated.