Archive for the ‘Mortgage’ Category
To secure a commercial mortgage efficiently, you would do well to go through a mortgage broker who is a specialist in the area. There is a lot of paperwork to be completed when applying for a loan. Even if you prepare your application carefully and provide all required documents, you may not get the loan. This is a grave possibility, and you will have to begin the tedious process over again.
Market experts advise all borrowers, small or big, to utilize the services of a reliable, reputable and experienced commercial mortgage broker. Most people dither from hiring a broker to avoid paying the brokerage, but the lender will often take care of that payment so the onus is not on the borrower.
Commercial brokers are the key mediator between the lender and borrower. They have expertise not only in brokerage, but also in areas of investment, management, and consulting. A broker submits your completed commercial mortgage application to several commercial lenders simultaneously. This increases your chances of approval and saves you precious time. The commercial mortgage broker works with many different lenders daily, and knows what each lender looks for in an application. This in turn implies that brokers will send your application to only those lenders who are likely to approve your loan under their given policies.
Brokers receive payment only when they are successful in matching applicants with lenders. What motivates them are financial incentives. Working with a commercial broker will cost you nothing at all. In fact, your chances of getting your loan approved quickly will increase. Also, you will be left with more time to get back to your business. Additionally, your broker may get multiple lenders to approve your loan, which will permit you to bargain for better mortgage terms. An added advantage is that your commercial mortgage broker will lead this negotiation so you can trust his expertise.
Most people are unaware or wary of trying out a broker’s services. A commercial mortgage broker can remarkably streamline your commercial mortgage approval process through his expertise.
In the old days if your credit history was less than perfect, the only mortgage you would be offered would be one with extortionate interest rates from a shady broker.
Nowadays, there are more sympathetic lenders who will offer you a bad credit mortgage without charging you sky-high interest charges. And because there are more lenders out there now offering these non-standard mortgages, it has driven the interest rates on them down which is good news!
The term ‘Bad credit’ can be anything from County Court Judgements (CCJ’s) on your credit file to something like having missed a mobile ‘phone payment or made a few mortgage payments late.
More and more people now have a ‘bad’ credit file. Rising inflation and credit companies making it easier for people to borrow means that just because you have a bad credit file, you are not rubbish with money!
So, what can you do to get a mortgage, without being ripped off by greedy lenders?
First of all, if you are considering using a mortgage for debt consolidation, do bear in mind that it will probably cost you more in interest in the long run. And also the debt will be secured against your home, so you must really ensure that it is affordable to you.
And when it comes to choosing a mortgage, do not apply for the first mortgage that you see. TV adverts saying that they can help people with bad credit are all very well – but many of them charge as much as a 3% fee to arrange a sub-prime mortgage. So, on a £150,000 mortgage, they get £4,500!
Get independent advice from an independent mortgage specialist as well as doing your own research. ‘Bad credit’ no longer has the financial stigma it used to, so hold out for the right deal for you.
How the web can help you if you are looking for a bad credit mortgage
If you have a poor credit history, finding a mortgage specifically for people with bad credit can be difficult. And even if you do find a mortgage, how do you know that it is the right one for you?
Using the internet can help. There is tons of information on there relating to bad credit mortgages such as free guides, as well as access to providers of bad credit mortgages.
Going online also allows you to compare multiple providers so that you can look at all the product features and benefits to decide whether it is right for you.
There are also websites that accept online mortgage applications and there are hundreds that offer free and immediate online quotes. This means that you can see how much you can really afford to pay out for a mortgage.
Steps to improve your credit rating
If you have recently applied for credit and have been turned down or you have been offered credit but at higher interest rate than advertised, then this is probably because of your credit rating.
Even if you never miss payments or do not have any debts such as a loan or credit card, you could still have a low credit rating.
This is because you can be penalised if your credit record is empty. Prospective creditors like to see positive entries on your credit fie and if you have no financial history, they are unable to judge how well you manage your credit.
The solution is to develop your credit file by adding positive entries on your record. Running bank and savings accounts as well as paying your mobile phone bills on time are a good start as are well managed credit card and store card accounts.
If you do not have any credit accounts, then gradually apply for them. Don’t apply for lots of credit all one go as this will look like you are in financial distress. Instead, get one card at a time with a low credit limit and pay the balance off in full every month. Open up a bank and savings account. And pay your bills on time – even the small ones!
Start building a financial history gradually and over time you will find it easier to get credit, and at a better interest rate too.
Getting rid of the mortgage early is something that many home owners in the UK aspire to achieve. Being free of the principal financial debt in most people’s lives at the earliest stage possible offers financial security and peace of mind for later on in life. Paying off the mortgage early is no pipe dream though. In 2003, the average age of outright home ownership was 56, by 2004 the average age had fallen dramatically to just 48!
How home owners pay off their mortgages early
The secret to paying your mortgage off early lies in choosing the right type of home loan, and this is where flexible mortgage loans and offset mortgage loans step in.
Flexible mortgage loans, as their name suggests, offer flexible mortgage repayment terms where overpayment of mortgage is allowed by the home owner without incurring a penalty. Some flexible mortgage loans allow overpayment of a limited amount, such as 10% of the mortgage value, while other flexible home mortgage loans cater for unlimited overpayment by the home owner.
The advantage of flexible home mortgage loans is that as well as allowing you to overpay, you can also underpay, so taking a ‘payment holiday’ if finances become a little thin. Underpayment is of course subject to the terms of the mortgage, and will normally only be allowed if it amounts to less than the funds that have been overpaid.
Overpayment via flexible home mortgage loans means that you get to reduce your mortgage capital as well as pay off interest accrued on the capital each month. For each successive month that you make an overpayment the amount of interest paid on the overall mortgage is therefore reduced. An overpayment of just £65 on an £80,000 mortgage with the interest rate at 6.0%, will see mortgage loans paid off 5 years early, amounting to a total saving of some £15,000.
Offset home mortgage loans
Offset home mortgage loans were unveiled to the home owner in 1998, and have gained a great deal of respect from home owners since that time. Offset mortgage loans help to pay off a mortgage early by using what is known as a ‘sweeper’ system. Providing that the home owner has their current and/or savings account with the mortgage loans provider, their available balance is ‘swept’ across to their mortgage account each day to offset/reduce the amount of mortgage capital subjected to interest.
To illustrate the advantages of offset mortgage loans, take a mortgage of £100,000 and a balance of £10,000 in your current account and/or savings account. Instead of the interest rate being applied to the £100,000 every day or every month, the interest rate would be applied to your mortgage balance less the balance in your current account / savings account. This means that interest would only be applied to £90,000 of your mortgage, effectively making 10% of your mortgage interest-free!