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Mortgage Tips For The Frantic
It is a curious fact of human nature that people will haggle over the price of an umbrella, but buy a house on impulse.
We understand small amounts of money; we know what they can buy. £200,000 is harder to grasp; you can't fit it in your pocket. The desire to acquire, combined with the stress of the purchase, can make people do funny things. With this in mind, here are a few tips to review when getting a mortgage.
Watch out for the 'Deal Of A Lifetime', the deal that seems too good to be true. The company may be saving money by cutting back on their level of service.
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.
When interest rates fall: try and leave your repayments as they are. You will therefore be paying more than the minimum each month. You'll repay your loan much earlier. When rates rise again you may not have to change your payment.
Consider a fifteen or twenty year term. Try to pay off your mortgage quickly. Use a mortgage calculator with an amortization function, and see what's possible.
Keep your mortgage as small as possible. Aim for *comfortable* affordability.
You will find mortgage lenders who will stretch your qualification ratios. They aren't doing you a favour. The qualification ratio is the ratio of your total mortgage payment to your total income.
The traditional ratios are: The mortgage payment as 28% of your income; the total of your mortgage payment plus your monthly debt payments as 36% of your income.
Try not to 'churn' your mortgage. Each time you refinance you'll probably incur completion costs and non-refundable fees.
Beware of prepayment penalties. Many 'no fee' credit lines have a pre-payment penalty. This can be very expensive if you are planning to refinance or sell your house in a few years time.
You don't need to sign a mortgage agreement which contains any significant prepayment penalty, if you have good credit. One of the smartest things you can do with a mortgage is to prepay it.
Don't look for a home without being pre-approved. You will have much more negotiating power with the vendor, and may be able to save thousands of pounds.
Get a full, professional survey. Human beings can be perverse; happy to spend £150,000 on a house after a half-hour viewing, but be-grudge spending £500 finding out whether it's worth buying in the first place!
Find out the true value of your home. Get more than one independent appraisal. Compare it with the prices of similar-sized houses for sale in the same area.
Start gathering documents. Provide your mortgage company with documents in good time; don't let your rate lock expire!
Verbal (oral) agreements are worthless. When buying or selling property, always get it in writing.
When you do get your mortgage, check your payments are correct - do the mathematics. There's a one in ten chance you could be paying more than you should.
Review your mortgage regularly - this, and possibly remortgaging, will ensure you pay as little as possible in interest.
Finally, consider the following advice from the U.S. 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.
A mortgage is the biggest financial committment most of us will ever make; worth spending a little time on, to get it right!
About the author: T. O' Donnell (http://www.tigertom.com/mortgages-uk.shtml) offers mortgage quotes, advice, an ebook and a mortgage calculator, in London, UK.
MORE RESOURCES updated Tue. June / 06 / 2023
Today's Mortgage, Refinance Rates: June 6, 2023 | 30-year Rates Increase 1.7% Since Last June - Business Insider
Today's Mortgage, Refinance Rates: June 6, 2023 | 30-year Rates Increase 1.7% Since Last June Business Insider
It May Cost More to Refinance a Mortgage Than You Think Yahoo Finance
The Great Pandemic Mortgage Refinance Boom - Liberty Street Economics Liberty Street Economics -
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The Fed’s man-made housing market recession hit so hard that 4 real estate titans just lost their Fortune 500 status - Fortune
The Fed’s man-made housing market recession hit so hard that 4 real estate titans just lost their Fortune 500 status Fortune
No Regrets Getting An ARM Despite Higher Mortgage Rates Financial Samurai
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Refinancing your mortgage could save you thousands — here are some of the best refinance lenders - CNBC
Refinancing your mortgage could save you thousands — here are some of the best refinance lenders CNBC
How does mortgage refinancing work? CBS News
Here’s how sharply mortgage refinancing has dropped off Yahoo Finance
Today's Mortgage, Refinance Rates: May 29, 2023 | Rates Still High Business Insider
CFPB Launches Effort to Spur New Opportunities for Homeowners ... - Consumer Financial Protection Bureau
CFPB Launches Effort to Spur New Opportunities for Homeowners ... Consumer Financial Protection Bureau
Today’s 30-year mortgage refinance rates hit lowest levels in 15 days | Oct. 28, 2022 - Fox Business
Analysis | It Will Pay to Wait to Refinance Your UK Mortgage The Washington Post
Why Older People Can’t Get New Mortgages The New York Times
Should you refinance your mortgage to pay off debt? New York Post
VA refinance rates - current VA loan refinance rates today Business Insider
Small Business Loan Refinance Bankrate.com
11 Home Refinance Loans For Bad Credit (June 2023) BadCredit.org
Current 15-year refinance rates today Business Insider
Refinance Closing: An Overview Zing! Blog by Quicken Loans
What Credit Score Is Needed To Refinance a House | Chase Chase News & Stories
Compare Current 30-year Refinance Rates Business Insider
7 Refinancing Programs for Seniors Total Mortgage
Today’s mortgage refinance rates: 10- and 15-year rates hold steady | September 20, 2022 - Fox Business
Today’s mortgage refinance rates: 10- and 15-year rates hold steady | September 20, 2022 Fox Business
Understanding A No-Appraisal Refinance Zing! Blog by Quicken Loans
How to Refinance a Car Loan in 2023 Investopedia