Welcome To America's #1 Mortgage Refinancing Solution : 800-966-3026
If you are looking for a suitable fixed mortgage type loan, it is supportive to know your short and long-term plans for the property, and consider your financial situation, as there are advantages and drawbacks depending on how you are using it. While fixed-rate loans offer the confidence of knowing your payment will never increase, long-term loans will likely have a higher interest rate. To be sure you make the right decision, you can ask your potential lender to fully explain the loan terms to you until every doubt is cleared.
The benefit of a fixed rate mortgage is that you always know what your monthly mortgage payment will be. And if you get it at a low rate, as is the usual case, it may be more beneficial over the long term. It will not go up and down to reflect the changes in the economy, as a variable rate mortgage would. Initially, you will be offered a lock-in interest rate. That interest rate is only good for a certain number of months or years depending on what is being offered. The initial interest rate term ranges from 6 months to 5 years. When this initial period ends, your rate will be recalculated according to your provider's standard variable rate.
However, it is more difficult to qualify for this type of loan and typically, you are not able to borrow as much money as you can which is limited by the value of your collateral. Additionally, it may be more costly to have a fixed rate mortgage should interest rates fall in the market in future. Short term fixed rate mortgages usually have a lower interest rate than long-term loans because the lender risks the cost of funds rising above the rate of returns while locked into a long-term loan.
The best deals at the moment are for those able to put up bigger deposits to ease lenders concerns and reduce their risk. Hence, if you can put up a 25 to 40% mortgage you can get a decent rate. You also need to be aware of the small print. Many lenders will charge an early redemption fee should you wish to get out of your mortgage early, may be to take advantage of a better offer, so do check this before going ahead.
Also, it is always better to get quotes from five or six lenders and compare their rates before applying. Two major factors that are needed to compare are the interest rate and the points. Points are fees paid to the lender at the beginning of the mortgage period. They are based on a percentage of the loan. So, one point equals one percent of the loan amount. For example a 100,000 UK pounds mortgage with 1.5 points would cost 1,500 pounds. Apart from the initial interest rates, compare also the standard variable rate (SVR). One lender may have a low initial rate and high SVR. Other factors to compare additional costs and fees involved in the loan. Some companies, for instance, charge their customers with cancellation fees, survey costs, and application fees. Whereas, these are free in some companies.
Moreover, the rates vary from one lender to another due to competition and also as way to lure customer. For example, one particular lender may offer a lower interest rate than another but the points may be higher resulting in a less attractive loan. The important consideration here is the length of time you plan to hold the mortgage. The longer you plan to keep the mortgage; a higher point with a lower interest rate is more useful. And, the less time you plan to remain in a home you may be more likely to benefit from low or no points with a higher interest rate.
It is easy to do the calculation and comparison online. You can check out those online sites that compare fixed rate mortgages of different lenders. You can also get information and advice from an online broker who will compare rates and find the mortgages for you. You can also fill out application forms on lending company sites. It usually takes but an hour or less to receive online quotes from them.
Useful Links : boon bath toy holders,
emergency personal loan,
fixed rate mortgage uk,
cheapest fixed rate mortgage
mortgage refinancing: refinance mortgage
mortgage refinancing: refinance mortgages
Article Source: www.articlesnatch.com
No comments:
Post a Comment