Make certain you get specifics of house loans from many financial institutions or brokers. Recognize how significantly of a down payment you can afford, and find out each of the fees involved in the mortgage. Knowing just the amount of the monthly payment or the interest rate will not be enough. Demand details about the amount borrowed, loan term, and kind of mortgage to be able to examine the information. The subsequent details are essential to get from each loan company and brokerage:

Rates

Ask each mortgage company and brokerage for a selection of their current loan interest rates as well as if the rates being mentioned are the lowest for that particular day or week.

Ask whether the rates are for fixed interest rate bank loans or adjustable rate mortgages. Take into account that as soon as interest rates for adjustable-rate home loans climb, typically the same is true for the payment per month.

If the interest rate cited is designed for an adjustable-rate bank loan, ask the way your rate and loan payment may vary, including if the loan payment will be decreased if interest rates drop.

Find out about the loan’s annual percentage rate. The Annual Percentage Rate accounts for not just the interest rate but also points, broker fees, and a number of additional credit fees that you may be asked to pay, portrayed as a yearly rate.

Loan Points

Points are service fees paid out to the lender or broker for the mortgage and are generally connected to the rate of interest; usually the more points you pay, the lower the rate.

Look at your local paper or go online for information about interest rates as well as points presently being provided.

Ask for points to be quoted to you as a dollar-value, rather of merely as the number of points. This way you will actually understand how much you’ll have to pay.

Mortgage Loan Fees

Home financing often involves many fees, such as loan origination or underwriting charges and broker fees. There may be additional costs such as: transaction fees, settlement costs, and closing costs. Any lender or brokerage are able to give you an estimation of their costs. Many of these fees are flexible. A few fees are paid when you make application for a loan (such as application and appraisal fees), yet others are paid at closing. In some instances, you can borrow the money necessary to pay these types of fees, however doing this raises your loan amount as well as total costs. “No cost” loans are sometimes available, but they typically involve larger interest rates.

Question exactly what each fee incorporates. Various items may be combined into one fee.

Ask for a clarification for any fee you don’t comprehend.

Downpayments And Private Mortgage Insurance

Some loan companies require 20 percent of the home’s purchase price as a down payment. However, many lenders currently provide loans that require less than 20 percent down. Often this could be as low as 5 percent on conventional home mortgages. If the twenty percent downpayment isn’t made, mortgage lenders usually need the buyer to buy private mortgage insurance (PMI) to safeguard the lending company should the buyer neglect to pay. When government-assisted programs such as FHA (Federal Housing Administration and VA (Veterans Administration) are obtained, the down payment requirements could be substantially less.

Find out about the lender’s specifications for your down payment, particularly what you should do to verify that money for your downpayment are available.

Ask your lender regarding special programs it might propose.

If PMI Is Necessary For Your Mortgage Loan

Ask what the total cost of the insurance policy will be. Find out how much your monthly payment will be when the PMI premium is added.

Before you call a bank, make sure you read Thomas Penter’s free report on home loans and visitmortgage masters.

Technorati Tags: adjustable rate mortgage, APR, financing, fixed rate mortgage, home financing, Home Loans, Homes, Houses, interest rates, loans, mortgage, mortgage master, mortgage rates, Mortgages, PMI

Choosing a superb mortgage agent entails getting somebody that places your own concerns first. Numerous mortgage lenders are desperate for capable home buyers. Consequently, numerous lenders may assert almost anything to have you take a loan. Placing your personal needs first requires making the effort to evaluate your present scenario.

Due to the fact that income to loan providers are determined by the final price of your house, be mindful anytime real estate professionals along with loan merchants try and have you purchase the most expensive property you could buy. It’s not always beneficial for you.

They may also tell you about a particular interest rate in which they got for another customer. The problem with this is that they may not disclose that this particular customer paid discount points, put a lot of money down, and had near-perfect credit. A mortgage broker must evaluate all of your economic situation prior to knowing what interest rate you can expect.

You should consider your long term goals. What are the odds that you will need to relocate within the next five years? If there is a high probability that a life situation will cause you to move, you shouldn’t purchase a home.

I believe that you should always strive to get a fixed rate mortgage. The reason for this is because you have no control over long term inflation. With a fixed interest rate, you always know what your payment will be. In addition, you are prepared for the worst case scenario. Adjustable rate mortgages are generally attractive in the short run. However, they may cost you dearly in the end.

The mortgage agent which you will hire is far more critical compared to the financial institution. Since the majority of mortgages are grouped and marketed to various finance institutions, it matters very little as to who’s going to be providing credit for the money. Take into account that obtaining a mortgage loan can be a extensive and complicated operation. Your loan officer needs to be make certain you grasp all the steps of the procedure.

Eileen Jacobs is a loan officer in Las Vegas, NV | Mortgage Broker Las Vegas | View her blog here: Las Vegas Mortgage Blog

Technorati Tags: adjustable rate mortgages, find good loan officer, find good mortgage broker, fixed interest rate, fixed rate mortgage, good loan officer, ideal loan officer, loan officer, Mortgages, why the ideal loan officer is much more important than the loan provider

7 Tips to Refinance a Mortgage Loan to Make It Affordable
By Jessica N. Bennet

The mortgage rates are quite low in present times. It is about 4.8% on a 30-year FRM (in March 2011). So, this is the ideal time to refinance your existing home loan if you’re making monthly payments on a comparatively higher interest rate. However, you should consider certain factors while refinancing your existing mortgage loan with a new one.

Tips to follow while refinancing mortgage

Here are some tips that you can follow while refinancing your existing home loan in 2011. These tips may help you save hundreds or even thousands of dollars on the refinance loan you obtain.

1. Decide whether or not to refinance – Before starting to shop for the best rates, it is quite important to decide whether or not refinancing is right for you. To do this, ask yourself why you want to refinance. It may be due to the fact that your credit score has improved over time and you want to reduce your interest rate by taking advantage of the current low market rate. You can lock-in the current low interest rate by converting your ARM (Adjustable Rate Mortgage) to an FRM (Fixed Rate Mortgage).

2. Shop around for best rates – While shopping for mortgage loans, make sure you consider the whole package. One lender may offer you a low rate but he may require a balloon payment after every 6 months or 1 year. Another lender may charge a closing cost that’s quite high. So, you should understand the entire package to decide which loan is right for you.

3. Get pre-approved by several lenders – It is advisable that you get pre-approved by several lenders while shopping for home mortgage refinance loans. However, be careful that the lenders don’t pull your credit reports as otherwise it may hurt your credit record thus reducing your score to some extent. Only authorize those companies/lenders to pull your credit reports who offer the best mortgage refinance rates.

4. Consider interest rates and closing costs – The closing costs that you have to pay should be an important deciding factor along with considering the interest rates offered on the refinance loans. It may happen that a company is offering you a refinance loan at a comparatively lower interest rate but charging hefty fees for it. One of the best ways to decide is finding out whether or not your savings through refinance can offset the closing costs within the time period you plan to reside in the property.

5. Check pre-payment penalties on existing mortgage – You should check whether or not there are pre-payment penalties on your existing mortgage loan. If there’s such a penalty, then you should have enough funds to cover it. Usually, lenders charge a pre-payment penalty that’s equivalent to about 6 months’ interest payment on your existing mortgage loan.

6. Read the fine print carefully – Often borrowers make a mistake by not reading the fine print carefully before taking out a refinance loan. It is needless to mention that you should get everything (each and every refinancing terms and conditions) in writing. It includes interest rates, closing costs, pre-payment and other types of penalties associated with the refinance loan.

7. Take out an affordable loan – Do not take out a loan that you cannot afford. It is advisable to not go for cash-out refinancing if you haven’t yet decided how to spend the amount or you don’t have a solid reason to tap your home equity.

One last tip – you should check your credit score before shopping for mortgage loans and if required, raise it to get favorable terms and conditions on your home mortgage refinance loans. In the present scenario, lenders may offer you the best rate on a conventional mortgage loan if your credit score is 700 or more.

Jessica Bennet with her vast experience in the mortgage industry has been associated with the MortgageFit Community as a Mentor. Not only does she participate in the community forums to give her suggestions, but also makes her contributions through different articles on mortgage.

Article Source: http://EzineArticles.com/?expert=Jessica_N._Bennet

http://EzineArticles.com/?7-Tips-to-Refinance-a-Mortgage-Loan-to-Make-It-Affordable&id=6240779

Technorati Tags: best mortgage refinance rates, closing cost, closing costs, fixed rate mortgage, home mortgage refinance loans, interest rate, mortgage loan, mortgage refinance rates, refinancing a home, refinancing a home loan

If you’re using a mortgage to buy your home but are not sure which one will suit your needs best, read this handy guide to mortgage types in the UK. Taking out a mortgage has never been easier.

Fixed Rate Mortgages – the lender will set the APR (Annual Percentage Rate) for the mortgage over a given period of time, usually 2, 3, 5, or 10 years as an example. The APR for the mortgage may be higher than with a variable rate mortgage but will remain at this ‘fixed mortgage rate’ level, even if the Bank of England raises interest rates during the term of the mortgage agreement. Effectively, you could be said to be gambling that interest rates are going to go up, above the level of your fixed rate mortgage interest rate. If this happens, your mortgage repayments will be less than with a variable rate mortgage.

Variable Rate Mortgages – the lender’s mortgage interest rate may go up or down during the life of the mortgage. This usually happens (though not exclusively) soon after a Bank of England interest rate change. Most people consider that opting for a variable interest rate mortgage is best done when interest rates in general are likely to go down. They can then take advantage of these lower rates when they occur. It’s a bit of a gamble but if they are right, it could really work in their favour.

Tracker Mortgages – have a lot in common with variable interest rate mortgages in that the APR of the mortgage can go up or down over the term. The key difference between a tracker mortgage and a variable interest rate mortgage is that the lender will set a margin of interest to be maintained above the Bank of England base lending rate. So, as the Bank of England, in line with monetary policy, raises or lowers the base lending rate of interest, so the tracker mortgage interest rate will follow. Over the lifetime of the mortgage, it could be said that the borrower will neither be better off nor worse off because of interest rate fluctuations.

Repayment Mortgages – you will be required to pay a proportion of the capital element of the mortgage (how much you originally borrowed) together with a proportion of the interest that will have accrued on the capital element, with each monthly repayment. In recent years, repayment mortgages have become highly popular over the previous favourite – endowment mortgages. This is because, unlike endowment mortgages, as long as you keep up your monthly repayments, you are guaranteed to pay the mortgage off at the end of the agreed term. Monthly repayments may possibly be a little more expensive but many borrowers say that at least, they have peace of mind.

Interest Only mortgages – very common amongst borrowers who are looking to secure a second property. The reason being, with an interest only mortgage, the borrower will only be required to make monthly repayments based on the interest element of the mortgage. The lender will require the capital element to be repaid at the end of the term of the mortgage. Again, as with variable rate mortgages, this could be regarded as being a little bit of a gamble because the borrower is hoping that the property will be worth at least as much at the end of the term of the mortgage, as it was at the beginning, allowing it to be sold and the capital element of the mortgage to be paid off. Any capital gain on the property (although possibly subject to tax) is yours. It could be argued that experience tells us that property prices rarely go down in the long term, but it can never be guaranteed.

Capped Mortgages – a combination of the fixed rate mortgage and the variable interest rate mortgage. A cap or ceiling is fixed for a set period of time. During this period, if interest rates in general rise, above the capped interest rate, the borrower will not pay anything above the capped level. Correspondingly, if interest rates fall, then the rate of interest charged by the lender, will also fall so it could be argued that the borrower gets the best of both worlds. It could also be said that a capped rate is like having a set of brakes on your mortgage, but beware, the lender is also likely to charge a redemption penalty on this type of mortgage, making it less portable than some of the other options available.

Discounted Rate Mortgages – here, the lender may offer a reduced level of interest to be charged over a set period at the start of the mortgage term. Many first time buyers or people who expect their salaries to rise considerably during the discounted rate period opt for this type of mortgage but it should be noted that the reduced rate period will come to an end and when it does, the monthly mortgage repayments to the lender may rise sharply. The lender may also charge a slightly higher rate of interest compared with other types of mortgage over the rest of the term of the loan in order to recoup the monies that they have foregone during the discounted rate period. There’s no such thing as a free lunch!

Offset Mortgages – an interesting newcomer to the UK mortgage market, although still comparatively rare in terms of choice and availability. The mortgage is linked to the borrower’s current account. Every month, the minimum mortgage repayment is paid to the lender but where there is a surplus of cash in the account after other uses and debts have been paid, this is also paid to the lender. Over the months and years, the borrower can potentially pay off their mortgage much quicker and have accrued much less interest than with other types of mortgage provided that a reasonable surplus is maintained in the current account.

So, to sum up, the UK mortgage market has many types of mortgage; any or all of which may be open to the potential borrower, dependent on their circumstances. If you’re looking to take out a mortgage, remember that whilst your broker will take care of the vast majority of the work on your behalf, it may still take around 3 months to complete as there is an enormous amount of work that goes on behind the scenes with solicitors and searches, valuations etc. At least now you’re armed with all of tehinformation you need on each type of mortgage available to you.

This article is free to distribute however, please ensure that all links remain as in the original.

Andy Silk
http://www.articlesbase.com/loans-articles/mortgages-and-remortgages-which-one-will-suit-my-circumstances-129678.html

Technorati Tags: bank of england, bank of england base lending rate, bank of england interest rate, fixed rate mortgage, interest rate, interest rate mortgage, mortgage interest rate, mortgages and remortgages 8211 which one will suit my circumstances, variable interest rate, variable rate mortgage

remember the period of 2003 people got their fix rate mortgages from their adjustable rate mortgages…and wanted to know how common it is for some during this period got fix rate mortgages which were for only a specific length of time ??

why would anyone only get a low fixed rate for a specific length of time??

what are the advantages?

Thanks for your answers!

It’s a fixed period/adjustable rate loan. They come in 3,5,7, and 10 years fixed periods. The reason why people get these types of loans is because during the fixed period, the payment is only on the interest and is lower than if you had a 30 year fixed rate loan where you’d pay for both the principle and the interest.

The reason why you would not want to get this type of loan is that you probably cannot afford the monthly payment after the loan adjusts and you may loose your home due to foreclosure if you do not refinance before the adjustment date.

Technorati Tags: adjustable rate loan, adjustable rate mortgages, fix rate mortgages, fixed rate, fixed rate loan, fixed rate mortgage, how often do people get fixed rate mortgages that terminate after a certain period, length of time, low fixed rate, rate mortgages

There’s a lot of interest being shown in a totally new shared-equity mortgage, which will hopefully help a wide range of first time buyers to get into the property market.

Shared equity is not new and schemes have been around for some years which mainly involve housing associations but these were designed for the needs of low income tenants and council tenants.

A new government scheme called Homebuy which will allow property buyers to raise a mortgage of 75% and the balance of 25% will belong to lenders, the government or social landlords, such as housing associations. An innovative part of the scheme will involve the government owning 12.5% of the property, and the lender owning the other 12.5%. The purchaser will pay rent on the share owned by the third party. The Halifax, Yorkshire and Nationwide building societies are committed to the scheme but it is expected that others will get involved.

This help will still not reach everyone. Homebuy is designed to help people such as council tenants, and key workers, such as teachers and nurses wishing to buy their first home.

For a scheme to help everyone, it looks as though Advantage, owned by the US investment bank, Morgan Stanley, has come up with the answer for first-time buyers with its new Flexishare shared-equity product.

At the outset, Flexishare will be two year fixed rate mortgage. There will be a requirement for a 5% deposit and the loan will be split between a normal, conventional mortgage and something called a residential ownership loan, which can be between 15% and 35%. The interest rate on the loan is designed to be low, 3% has been suggested, but no decision on that has been made yet.

Loan repayments will be interest only and because that rate is planned to be lower than that of the mortgage, the total outgoing will be less than if the total loan was on a mortgage. I should look tempting to buyers who can’t meet the expense of a standard mortgage. As long as borrowers pass Advantages credit score, they should be eligible for the scheme.

Advantage will share in any rise or fall in the value of the property, as part owner.
This seems to be the answer to their prayers, for those who are unable to get a mortgage in any other way. The mortgage industry has shown a lot of interest in the scheme and if all goes well, no doubt other lenders will follow suit.

Schemes like this are coming about because house prices have risen appreciably in recent years. In some areas property prices have doubled in six years. A slight worry is that if schemes like Advantage’s become widely available, price increases could be pushed even higher.

The general feeling amongst the experts seems to be that house price growth will slow down in the near future and hopefully remain low for some time. This would certainly offer some hope to would-be first-time buyers caught in a spiral of ever-rising prices. The best plans for saving that necessary deposit easily gets over-taken by rising house prices.

For up-to-date advice and information on these house-share solutions the best plan of action would be to contact a broker, who will know if the product is right for you. The internet is a good place to look and brokers are able to offer special internet rates for some products. They’ll certainly be able to help will be pleased to hear from you.

Michael Challiner
http://www.articlesbase.com/mortgage-articles/mortgages-fair-shares-51594.html

Technorati Tags: conventional mortgage, council tenants, credit score, first time buyers, fixed rate mortgage, housing associations, investment bank, loan repayments, mortgages 8211 fair shares, year fixed rate mortgage

When most people think of a home mortgage, they think of the hundred thousand dollar loan that is taken out to finance the home.

While the loan has something to do with the home mortgage, technically, the mortgage is a legal contract stating the lender can have your home if you do not repay the loan.

This is worth bearing in mind.

Two major theories exist for how lenders handle home mortgage.

The theory followed depends on the state.

In one theory, deemed the title theory, the lender holds your title until the home mortgage loan is completely repaid.

If you can’t make payments, the lender has the ability to sell the title to get the money back for the loan. With the second theory, the lien theory, the lender has a lien on your property. In the event that you default on the mortgage, the lender can foreclose on the lien and sell the property.

The home mortgage payment you pay each month is made up of four components. The principle is the amount of money you are financing from the lender.

Interest is a percentage of the amount of money you borrowed charged by the lender as the price for lending the loan to you. Property taxes are put into a third party account until it is time to pay them. Your monthly mortgage payment includes part of the property tax. Finally, insurance is included in your home mortgage.

Repaying your home mortgage loan is done over a period of time. In general, each monthly payment you make decreases the principal of the loan. Your monthly payments are also going toward interest.

For the first few years of paying your home mortgage loan, you will notice that the amount of your payments that go toward interest is significantly higher than that of the principal payments.

There are two basic types of home mortgages: fixed rate and adjustable rate. With a fixed rate mortgage, the interest rate for the loan will never change.

Therefore, your monthly payments will basically remain the same for the life of the loan. Should the payments change, it is due to property tax and insurance payments that might be included in the payment. An adjustable rate mortgage has an interest rate that changed based on market rates and economic trends.

Initially, the interest rate of an adjustable rate mortgage is lower than that of a fixed rate mortgage, but the rate can rise over the fixed rate after a period of time.

Balloon home mortgages are another type of mortgage that has a low initial interest rate. The rate last between five and seven years. After this period of time, a balloon payment in the amount of the entire balance of the loan is due. This is a good mortgage for those who are planning to sell their home, refinance it, or pay it off before the final payment is due.

Since there are varying types of home mortgage loans, it is in your best interest to shop around among different lenders and the mortgage types they offer to find the right mortgage for you.

Gerald Mason
http://www.articlesbase.com/real-estate-articles/the-truth-about-mortgages-83091.html

Technorati Tags: amount of money, first few years, fixed rate mortgage, home mortgage loan, home mortgages, interest rate, mortgage payment, period of time, property tax, the truth about mortgages

30 Year Fixed Rate mortgages are now thought of as old fashioned. We use the words “standard” or “classic” or even “conventional” to describe one of the most popular loans in history. You may be surprised to know that the history of the 30 year fixed rate mortgage is not too long, and in fact its popularity a relatively recent affair. In fact, the 30 year fixed rate mortgage was introduced during the New Deal of President Franklin Delano Roosevelt’s administration through the creation of the FHA, or Federal Housing Administration.

Prior to the new deal, mortgages were primarily of the “balloon” variety, similar in concept to an auto lease. You could make payments each month for 20 years and still owe the bank a large lump sum at the end of the loan. More disturbingly, mortgages made prior to the advent of the 30 year fixed often had a “call” provision. You may have heard the expression of a bank “calling” a loan before, even if it was in an old movie. What this means is, unlike the fixed rate mortgages of today which have a definite end date, a bank prior to Roosevelt’s FHA could demand immediate payment at any time, regardless of how many years were left on the loan. If the borrower could not refinance, they would lose their home to the bank in a foreclosure. And lose them they did, by the hundreds of thousands at the very height of the Great Depression.

Roosevelt’s administration devised a new concept in banking, a loan which had a fixed period of time, called a term, during which a fixed amount of principal and a fixed or variable amount of interest would be paid back. In full. This new “fully amortizing” loan consisting of principal and interest was a major innovation in banking, and resulted in the explosion of home ownership that we have had in the USA since World War II.

The availability of cheap, safe home loans with no surprises may seem old fashioned today, but when we look at today’s market conditions, where interest rates rise daily and the mortgage industry roils under the burden of hundreds of thousands of bad loans, old fashioned 30 year fixed rate loans don’t seem like such a bad choice do they?

The problem most borrowers run into when they look to refinance into a 30 year fixed rate mortgage is that their payments look like they are going up. And in many cases this can be true, because not all borrowers qualify for the best rates, and qualifying for mortgages is harder today than it was five years ago as lending standards tighten. Whereas 30 year fixed rate mortgages used to be considered affordable by comparison to their competition, over the past 20 years they have become increasingly expensive compared to Adjustable Rate Mortgages.

A newer issue that affects many borrowers seeking to refinance into the security of a 30 year fixed rate is that they would have to give up some of the flexibility of their current Adjustable Rate home loan. This particularly affects borrowers who are currently in Cash Flow or Payment Option ARM mortgages, which allow borrowers to defer interest in exchange for home equity to obtain a dramatically lower minimum payment each month.

30 year fixed loans are good for a lot of things, but flexibility has traditionally not been one of them. Until now that is. New programs have been introduced over the past several months which combine the safe, secure dependable 30 year fixed rate mortgage with the powerful cash flow options of ARM mortgages. The result? The 30 Year Fixed Cash Flow mortgage. Low payments, Fixed Rates, and if you want to hold on to it for 30 years you’ll own the home at the end. They are incredible loans, allowing you to pay as little as $1100 a month as the minimum payment on a $500,000 mortgage, while maintaining a fixed rate for the life of the loan. No nasty surprises, no nightmares about your mortgage. Just a smart choice made more affordable, and surprisingly easier to qualify for. Provided that you have been paying your mortgage on time and have at least 20% equity in your home, these loans are generally available with no minimum credit score requirement, and certain lenders don’t even charge an appraisal fee upfront, making refinancing into a30 year fixed rate mortgage with a cash flow option one of the easiest, most effective ways to avoid the high payments you may face if your adjustable rate mortgage’s introductory rate is about to expire.

Bringing old fashioned sensibility to the creative financial options of today’s modern mortgages is a great fit for borrowers from nearly any walk of life, however it is important to note that only a handful of lenders currently offer this program. If your mortgage company cannot help you obtain a 30 year fixed cash flow refinance, feel free to contact us and we’ll try to steer you in the right direction. As always, our phones and our emails are open to your questions. Until next time, Live Smart.

Tristan Hunt
http://www.articlesbase.com/real-estate-articles/30-year-fixed-rate-mortgages-modernized-121522.html

Technorati Tags: 30 year fixed rate mortgage, 30 year fixed rate mortgages, 30 year fixed rate mortgages modernized, federal housing administration, fixed rate mortgage, fixed rate mortgages, franklin delano roosevelt, president franklin delano roosevelt, year fixed rate mortgage, year fixed rate mortgages

The time has come for you to buy a house, but for a first time buyer, the housing market can be frightening and confusing. Unethical lenders may try to ensnare you with high interest rates and a loan that will have you paying for years. Many houses are priced out of the range affordable by first time buyers. The market for mortgage loans fluctuates every year, the interest rates rising and falling without apparent rhyme or reason. All these things make finding a good deal on a house difficult.

A first time buyer should consider a number of factors before going to purchase a property, such as how much they will be permitted to borrow, how much they can afford to pay per month, the initial cash outlay for fees and deposit, and what kind of mortgage they ought to use. A mortgage broker, who will act as an intermediary to find you the right mortgage, can help immensely to ease this process.

It can be dangerous to borrow too much money to buy a house, no matter how tempting the idea of home ownership is. The problem of negative equity is when your mortgage is worth more than your house, is still a danger. Many first time buyers consider only the monthly payment when they sign up for a mortgage. It also is important to look closely at the full amount you will be paying, and the length of time it will take to repay. Some kind of deposit is normally required, as well. Though there are a few lender who will offer a mortgage for 100% of the price of your house, these are rare, and will ensure a long payment process. It is best to have at least 5% of the purchase price. If you have 10% or more, you can secure a better deal on your mortgage.

There are many different types of mortgage that can be chosen. These include the fixed rate mortgage – with an unvarying interest rate over the life of the loan, the adjustable rate mortgage is one where the interest rate is periodically adjusted based on a index, and the interest-only loan is where for a period of time, the buyer pays only the interest on the loan, then must begin making payments on the principal. These last two types can be tempting to the first time buyer with little income, but can result in more money paid out over the lifetime of the mortgage. An adjustable rate mortgage can be the better deal if interest rates continue to fall, but worse if they rise. Interest only loans permit a buyer who will be in better financial shape in a few years to get a foothold in the housing market. The downside is that the principal will be untouched for those years.

With careful planning and consideration, the housing market need not be frightening or daunting to the first time buyer. All that is needed is a good assessment of your needs and situation.

Derek Both
http://www.articlesbase.com/non-fiction-articles/what-you-need-to-know-about-uk-mortgages-as-a-first-time-buyer-107476.html

Technorati Tags: adjustable rate mortgage, first time buyer, first time buyers, fixed rate mortgage, high interest rates, housing market, interest only loan, interest rate, money to buy a house, what you need to know about uk mortgages as a first time buyer

Buying your first home can be a very exciting time. Getting on the property ladder and gaining your independence can be a hugely fulfilling experience. However before you reach this stage it is likely you will have to overcome many challenges including saving a deposit, finding a suitable property, paying a range of legal fees and securing the right mortgage.

Arranging your first mortgage can be very daunting with a mind-boggling number of products available and lots of jargon and legal processes to be understood. A house is likely to be the single biggest purchase you ever make so ensuring you compare mortgages to find the right one is vital.

The first step is to work out how much you can afford to borrow. This is dependant on a number of factors including your income, your credit history and the value of your deposit. Mortgage products are available for up to 125% of the purchase price, but typically a 5-10% deposit is required. Saving up a larger deposit could allow you to secure a more competitive mortgage rate. On average a £100,000 mortgage at 5.5% over 25 years would result in monthly repayments of around £620.

Once you know how large a mortgage you are likely to qualify for the next step is to compare the market to find mortgages most appropriate to you. At this stage you will also want to start looking for suitable properties in your price range. There is little point approaching a lender for a mortgage if there isn’t a property you like in your price-range. However, if you can find properties you like, it is advisable to have a confirmed ’agreement in principle’ in place from a lender before making an offer as this proves you are a serious buyer

There are many mortgage products out there so visiting the internet and using a mortgage calculator will mean you can compare products more quickly. When searching the market you will find a range of mortgage products on offer. These include fixed, tracker, capped and discounted rates. Fixed rate mortgages are a popular choice with first time buyers as they allow you to budget your expenditure with a greater degree of certainty.

When deciding which mortgage product is right for you there are several factors to consider. Firstly is the rate competitive? The best way to determine this is to use an on-line mortgage comparative site that will allow you to compare all the products in the market. Secondly is the rate likely to increase? Tracker and discount rates may appear more attractive than a fixed rate but could you afford the additional repayments if interest rates were to increase? In addition to these factors it is important to consider the fees that will be applicable to your mortgage. These can include a valuation fee, a booking fee and an arrangement fee. In addition to stamp duty these fees can have a significant impact on the affordability of your mortgage.

Once you have found a suitable mortgage you have the option of either contacting the provider directly, or, if you feel more guidance is required you can contact a financial advisor who will speak with you about your requirements and help you arrange a suitable mortgage. The mortgage market can be a confusing place and the best action to take if you are unsure is to take professional advice. Choosing the wrong product can be a very costly mistake.

Peter Ecob
http://www.articlesbase.com/mortgage-articles/a-guide-to-first-time-buyer-mortgages-119513.html

Technorati Tags: a guide to first time buyer mortgages, competitive mortgage rate, first time buyer, first time buyer mortgages, fixed rate, fixed rate mortgage, mortgage comparative site, mortgage product, mortgage products, single biggest purchase