How To Save Money When You Apply For A Mortgage!

So, you're about to get a mortgage? Take a deep breath. Prepare to spend a little bit of time doing your homework. Three or four hours of effort may end up saving you thousands of dollars now, and tens of thousands of dollars over time. Home financing can be intimidating, but it's not rocket science. A few basic considerations can make a world of difference.



Let's get started



Educate yourself. Get several quotes. Mortgage brokers will generally offer a better deal than a bank, but it doesn't hurt to call a bank or two for comparison as well.



A good loan originator will spend as much time with you on the phone as you need. And a truly professional loan originator will ask enough questions to understand your goals. If you don't feel good about a conversation, trust your instinct; cross them off your list and move on.



Get everything in writing



Make sure to ask for Good Faith Estimates. There can be quite a few costs associated with getting a mortgage. You want to see every one. Comparing Good Faith Estimates can be challenging because different mortgage lenders often use different terminology.



Don't let that stop you. It's also a good idea to ask the mortgage broker if there are any additional costs that are not shown on the estimate.



Ignore the APR



APR, or Annual Percentage Rate, was originally designed to help borrowers compare mortgages. I won't go into the mathematics involved, but in principle APR was a good idea. In practice it has turned out to be useless. Lenders do not all use the same inclusion methods in calculating APR. To add to the confusion, adjustable rate mortgage calculations are notoriously misleading.



But that's okay! APR involves two variables, note rate, and closing costs, and all you need to see is on the Good Faith Estimate.



Points versus rate



I've been a Florida mortgage broker since 1989. My company is also licensed in Georgia, Massachusetts, and Virginia. We talk to lots of people about home financing. It's my experience that when people are shopping for a mortgage they often fixate on the interest rate, and overlook the points. Interest rate and points are inversely related.



Unless you specify that you don't want to pay points a lender is likely to price your loan with one or two points. This will make your rate lower, but it may not be a better deal. If the lower rate saves you fifty dollars a month on your payment but you pay an extra five thousand dollars in points, it will take you eight years to catch up with the cost of the points. Do the math.



The margin trap



Many adjustable rate mortgage programs now offer a variety of margins for you to choose from.



This means that you may have an opportunity to control your future interest rate. Sooner or later all adjustable rate mortgages adjust to an interest rate that is equal to an index plus the value of your margin. You have no control over the movement of the index. But if you can get a lower margin you will have a lower rate (once your loan starts adjusting) for as long as you have your loan. Your good faith estimates should all indicate the margin for your loan. Call the individual mortgage brokers and tell them you are interested in a lower margin.



Don't be shy. It's your money!



Pre-payment penalties; Good and bad



As a Florida mortgage broker licensed in several states I discuss financing with many people every day. Most people are averse to considering a loan with a prepayment penalty. But it is worth looking into. Adding a prepayment penalty to your loan may reduce your interest rate significantly. Prepayment penalties typically expire after three years, but recently many lenders have started offering a choice of one, two, or three year penalties.



Will you still be in the home past the expiration of the prepayment penalty? If you outlast the penalty you have reduced your monthly payment for as long as you have the loan. That can add up. And it didn't cost a penny!



Choose wisely



There are an amazing number of mortgage programs to choose from these days. You can select a fixed or an adjustable rate mortgage. Or you might choose one of many hybrid fixed period adjustable programs designed to give the comfort of a fixed for a predetermined number of years before starting to adjust.



Interest only options are available now on both fixed and adjustable rate programs. When selecting your mortgage program think about yourself. Any decision only makes sense if it makes sense in the context of your life.



Copyright ฉ 2007 James W. Kemish. All Content. All Rights Reserved.

Choosing A Mortgage - It's Not All Fixed

If you are a homeowner looking to limit the effects of rising mortgage rates you should make sure you consider discount-rates as well as fixed-rates. Whilst fixed-rate mortgages give people certainty of payment, they may not have the cheapest cost over the life of the mortgage. Particular care should be taken when there is a prospect that interest rates may start to come down- in these circumstances taking out a three or five year fixed rate mortgage may be throwing money away.



Recent research by mform.co.uk found that as at 26 July 2007 the average true cost of the 10 best two-year discount deals is ฃ1,697.04 lower than the average true cost of the 10 best two-year fixed deals - around ฃ70 a month. A borrower would pay an average ฃ16,526.16 over two years in a top 10 discount deal compared with ฃ18,223.20 in a fixed deal.



The true cost of the top 10 discount deals over two years ranges for a ฃ150,000 loan ranges from ฃ12,796.50 to ฃ17,694 compared to a range of ฃ15,095 to ฃ18,939 for two-year fixed deals.



Most recent Council of Mortgage Lenders figures show that in May this year 78 per cent of mortgages taken out were fixed rates as borrowers reacted to rate rises and the threat of more to come. The mform.co.uk research could suggest that borrowers should be taking a long hard look at discount rates.



Discount rates presently offer good value and also enable borrowers to benefit if rates start to come down next year as some commentators are predicting.



One of the main drivers of the decision on which type of mortgage to choose should be a view on interest rates.



Having formed a view on that, you should use a mortgage comparison site that looks at the whole of the market and allows you to compare mortgages on the true cost over the period of the mortgage deal.

Why Do You Need to Use a Mortgage Adviser?

Taking out a mortgage is probably the biggest financial commitment you will ever choose to make. The term of the loan will probably last until you are near to retirement age and in many cases the loan amount will become larger as you move up the property ladder.

So, as a mortgage seeker, what is the most important factor to consider when researching all of the different mortgage options?
For most people it is to simply find the best interest rate on the market but if it really was that simple then everyone would always get the best mortgage products available!

Many homebuyers first stop is their current bank.



In some cases they find that their own personal circumstances do not match the lending criteria of their bank and may leave feeling disillusioned with the whole process.

It is also true that many people who do fit their banks criteria accept the first rate the bank offers them, without researching the whole of the mortgage market and never realising that there may be far better products on the market that would suit their own personal needs.

There are often many different obstacles in the way to make it very difficult and confusing for you to choose the correct mortgage option, and this is where a mortgage adviser can come in very handy.



A mortgage adviser is a qualified professional who either offers mortgages from the whole of the market, is tied to one particular lender or offers advice from a panel of lenders.

What are the different types of Mortgage Advisor?

There are mainly three different types of mortgage adviser. These being: -

1. An adviser who has access to the whole of the mortgage market.
2. An adviser who is tied to a panel of lenders.



3. An adviser who is tied to a single lender.


It may be beneficial to use a mortgage adviser who has access to the whole of the mortgage market as they can match your needs to the best mortgage product from the whole mortgage market that fits your own personal circumstances.

Many of the products available to the adviser will not be accessible to the average person on the high street, again allowing them to give you the choice of a better mortgage product.



This gives a mortgage adviser offering whole of market advice a distinct advantage over many individual lenders' as they are not tied to any one product or lender. Always check with your adviser to confirm if they source mortgages from the whole of the market!

Another big advantage of using an adviser is the amount of time they can save you! Firstly they will take your initial details by way of a fact find i.e. salary, credit history, property value, deposits etc.



An adviser will research the products available to find a mortgage, which is suitable for your circumstances. A key part of the adviser's job is to match your details with the lenders criteria. For example, if you had a poor credit history and were self employed with only two years accounts the adviser would research the products available to them to find you a company that can provide a suitable mortgage based on these circumstances.

Once a mortgage has been sourced and you are happy to proceed, an adviser can also save you valuable amounts of time and effort by working with your mortgage lender and solicitor to ensure that you complete your mortgage or remortgage as quickly as possible.



When you have a busy life it is often difficult to find the time to chase the lender or solicitor, in many cases you end up speaking to a variety of people, not understanding the jargon that they use and ending up feeling frustrated and stressed. An adviser can help alleviate some of this stress by doing the chase ups on your behalf, saving you valuable time.

Things to be aware of when choosing an adviser

The Financial Services Authority regulates most mortgage sales taken out on or after 31 October 2004.



This means that mortgage advisers have to adhere to the guidelines and regulations issued by the Financial Services Authority. Advisers have a duty to take reasonable steps to ensure that you can afford a mortgage that is recommended. There are also minimum qualifications that are required to become a mortgage adviser.

It is also important to find out if the adviser charges you any fees. Advisers are paid by the lender on completion of the mortgage.



However there are many advisers who will charge their clients a broker fee so not only are they being paid by the lender they are being paid by you too! This does not mean that the adviser is a disreputable broker, but you may want to make sure you are totally comfortable with any fees they charge.

In conclusion if you are unsure of whether you are going to be able to find the best mortgage yourself then using an adviser might be a good option for you. It is important you use someone you can trust to do their best to offer you the most suitable mortgage deal based on the information you have provided them.



Samantha Dorn has achieved her certificate in mortgage advice and practice. She has been working in the mortgage industry since 1996 and has experience within all aspects of the business from underwriting for lenders to working with packagers giving her vast amounts of knowledge of the mortgage industry. Samantha now runs her own business - Dorn Mortgage Services.

Get Free Online Mortgage Refinance Quotes to Get Best Deal on Refinance

Nowadays, you can get free mortgage refinance quotes from several online mortgage comparison websites without any difficulty. These websites connect borrowers to hundreds of lenders, making mortgage terms and loan evaluation easier. In addition getting mortgage refinance quotes online is really easy. You just have to fill in and complete a few online forms and submit the details. In few minutes, you will get different mortgage refinance quotes from different lenders; the whole process of getting free quotes takes less than 20 minutes.



This will save you from the dilemma of physically searching for lenders providing mortgage refinancing and can be beneficial as well.



There are a number of benefits of getting mortgage refinance quotes. Ahead of, you plan seriously to refinance your home mortgage; in that case, this has to be your first step. Because of getting mortgage refinance quotes; you can make a decision sensibly which lender provides the most excellent deal.



Evaluating different interest rates and payment plans and preferring one that goes well with your financial plan could indeed improve your monthly cash flow.



As you apply mortgage refinance quotes with many websites, it indicates that you are evaluating deals from various lenders to get the best deal possible. This may be noticed by some lenders who in turn will offer you a better deal than their competitors, as they will be vying for your business. Therefore, don’t hide the truth that you are getting quotes from several mortgage lenders.



In addition, you can indeed take benefit of free online mortgage refinance quotes from the comforts of your home. However, Comparing and searching for the right lender is not an easy job. You might have to dedicate a whole day searching for lenders on the Internet but may fail to get the deal you are seeking.



Online mortgage refinance quotes are usually offered free. However, there are a number of safety precautions, which you should take earlier than you use online mortgage refinance quotes services.



Lenders who successfully secure a deal with a client compensate Websites offering such services. Therefore, if you are requested to pay for mortgage refinance quotes services, better look elsewhere. You can get this service free on a lot of sites. In addition, you must read the privacy policies of sites that provide free mortgage refinance quotes services. The site is required to promise that your information will not be used for any other purpose. You will give private details exclusively only to search for a right lender.



Your details should not be, used or sold off to third party, for marketing purpose. You are as well required to examine the security aspects of the sites providing free online mortgage refinance quotes. At the same time as you get into their forms page, your browser must show a security icon. This means the website puts into practice usual safety measures on their forms page. If your browser shows a warning sign regarding the site’s vulnerability, in that case you should log out of that site and hit upon one that provides dependable Internet security.



Home loan refinancing can be very beneficial. It can improve your cash flow by lowering your monthly payments, save on the overall cost of the loan with lower interest rates and free you from so many worries. However, ahead of you make a decision to refinance, take your time to get reliable mortgage refinance quotes.