|
|
 |
|
 |
||
|
|
|
|
|
|
||
Rates May Be Rising: Mortgage And Refinancing Preparation Made Simple For You
Buying a home is probably the single largest investment most people make in a lifetime. By preparing yourself and your credit before a home purchase or refinance, you can ensure a smooth finance process and can potentially save thousands on your loan. Improve your financial profile now so you can take advantage of the low interest rates before they disappear.
Start by checking your credit
To get the best possible mortgage rate, make sure your credit history is healthy and accurate. Aim to raise your credit score above 650 in order to qualify for most prime loans.
If your credit score is not quite 650, focus your efforts on paying bills on time, reducing your debt balances, avoiding new inquiries and clearing negative inaccuracies from your credit report.
Make sure the information on your report is correct and fix any problems you discover. Give yourself 30-90 days for correcting inaccuracies. You can learn more online in the Credit Learning Center
Found an error while reviewing your credit with the lender? Ask about the rapid rescoring process where you can submit a dispute and potentially improve your credit in 72 hours.
Figure out how much you can afford
The rule of thumb is that most borrowers can afford a home that runs about two-and-one-half times their annual salary.
Calculate your loan-to-value ratio to see how much you can afford to borrow by dividing the loan amount by the propertys value. If your loan-to-value ratio is above 80 percent your rates may increase significantly. Find a less expensive home or save up for a down payment to lower this percentage.
Calculate your debt-to-income ratio by adding up your monthly debts and dividing by your monthly income. A debt-to-income ratio under 20-39 percent is usually considered good and will help you be perceived as financially stable.
Dont be afraid to start small. Just because you may qualify for a large loan doesnt mean that it is a smart financial decision to buy as large a home as possible. Take a careful look at your family budget and your housing needs before you decide how much you can really afford.
Be a smart borrower this summer and save thousands by preparing your credit before you apply for a loan. Find out the loan rate you deserve at Legal Helpmate Corp
How Not To Be Ripped Off By Mortgage Brokers
One of the things that bothers me about the mortgage industry is the number of unscrupulous brokers that operate in this market.
Talk about giving the industry a bad name!
I worked for a mortgage lender until quite recently and I used to be shocked at the fees that brokers charged their clients. I mean lets put this whole mortgage arranging thing into perspective.
Assume I am meeting a client today. The guy walks into my office and sits down and has a chat with me about getting a mortgage.
It appears that he is not a clean client as he is suffering from a few credit problems. Well, I stroke my chin and let out a couple of sighs but wait, I CAN HELP HIM.
I tell the client that it is going to be difficult but I think I can help him. There may be a few fees but hey, at least he is going to get a mortgage and that is all he cares about isnt it?
So, he needs to borrow ?150k. Because of ALL the work I am going to have do I am going to charge him a competitive fee of 3% of the loan amount. Thats right, ?4,500!.
But, he does have credit problems and he is going to get a mortgage and that is all he cares about right?
Oh, and the ?4,500 doesnt have to be paid upfront because all we will do is add it onto the loan amount. So thats ok ,right?
NO,NO,NO.
Ok I am talking about a hypothetical situation but this is one that is repeated everyday throughout the UK. In my opinion it is nothing more than robbery and shows scant regard for the clients wellbeing.
How can anyone justify charging that to a client that will already have to pay a higher interest rate than a clean client would.
So, to recap, the ?150k loan now becomes ?154,500 and that is before you even get to the solicitor and arrangement fees, let alone the Mortgage Indemnity Premium (MIG.
So, the rule of thumb here is a simple one.
Ask your broker to justify their fees and if you find anyone charging a fee of more than 1%, walk away. Quickly.
Fees Paid To Brokers By Mortgage Lenders Are Far Too High
Procuration fees paid by some sub-prime lenders are too high.
Fact.
There can be no justification for some of the fees paid by lenders. Proc fees of 2.75%-plus are simply deplorable when it is clients who will ultimately pay the price through an extra loading on the interest rate they pay, be it at the front end or - as is more common with some lenders - at the back end after an initial deep discount.
Traditionally, high proc fees were justified by the relative complexity and extent of the work undertaken by the intermediary on behalf of customers with specialist financial needs; for those customers with more heavily impaired credit backgrounds, there was more work so the fee was higher.
But advances in technology mean obtaining the required information is now relatively straightforward so how on earth can lenders still justify paying fees of 2.75% or more?
Consumer protection is paramount. Those lenders that continue to hide behind the excuse that the fees they pay impact only on their own profit and loss accounts are fooling nobody. In the end its the client that pays.
Its a sorry state of affairs when a lenders only method of attracting business is to pay a high fee.
The sooner the Financial Services Authority wakes up and takes a look at some of the players in this often murky sector, the better.
Its time for a change and we need it right NOW.
 |
©Copyright
InsideTheWeb.All Rights Reserved.
|
 |
|
|
||
 |
Designed by kohj |
 |