With booming real estate markets, greater lending competition and high consumer confidence, there has never been a better time to purchase your dream home and, by doing your homework before taking on a mortgage, you can get a better value investment for your dollar.
Because interest rates are still at record lows, getting the proper mortgage or remortgage offer may save you a few dollars each month.
There are a few secrets and simple tips buyers should know before shopping for a home loan mortgage. The first, and most important of these, is to do your homework. Home loans vary greatly and it’s important you find the one that best suits your situation.
With the rapid growth of online private investors, even people who the banks and major mortgage lenders won’t deal with can usually qualify for a home loan.
Potential purchasers should study their local real estate market to get a feel for what suburbs offer the best value and investment return potential, they type of property you are seeking, and how long you plan to live there.
Once you have a good idea of the property you are seeking and its price, work out your budget, list all your assets, and decide how much you can afford in repayments.
If you qualify for a loan from a bank or major mortgage lender, it is usually best to approach them for a loan, and don’t be afraid to negotiate on their establishment fees and interest rate. After all, there is plenty of competition and they want your business!
If you don’t fit into this category, you can still apply for a loan from an online private investment group who will lend on the basis of no credit checks, no income or employment verification, no tax returns, and no prepayment penalty.
The difference between the major lenders and these investor groups is that the former lend not only against the value of the property, but who is acquiring it based on income etc., whereas the latter are only interested in the value of the property.
You need to check the fees for private investor loans as they are usually slightly higher than conventional loans, but they give people the opportunity to buy their own home when otherwise they would be stuck in the rental cycle.
There are some type of homes, such as mobile homes, homes on stilts, or other unusual structures which may be rejected because their value may be an unknown quantity should the borrower default and the property has to be sold.
Lenders are more willing to provide money for home loans than any other type of loan because they know purchasers will always meet their mortgage repayments ahead of other payments, to protect their asset and keep a secure roof over their family’s head.
This makes it easy for almost anyone to get a home loan, but always remember the repayments have to be met, so don’t borrow more than you can handle. It’s a good idea to always keep your payments one or two months ahead so if anything does go wrong you have some breathing space.
So, by doing a little extra homework at the beginning, you should end up with your dream home and a reasonable mortgage that lets you sleep easily at night!
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