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Below, you'll find extensive information on
leading american home mortgage articles and products to help you on your way to
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Find The True Cost Of Your Mortgage
By James Miller
When comparing mortgage,
it isn�t just a case of looking at the difference in interest charging and
choosing the one with the lowest rate. There is so much more you need to
consider finding out the true cost of a mortgage.
First of all, how much is the arrangement fee? This can vary from lender to
lender. Sometimes it will be a flat fee of around �500. With others it can be a
percentage of the loan amount.
With the latter, as an example, a charge of 1.5% of the loan amount as a fee
equates to �2,625 on a �175,000 mortgage.
Also look at valuation, legal, early redemption costs and exit fees. Some
providers will offer a free valuation or similar as an incentive for you to buy
their product which could save you money.
Do bear in mind that overall, high charges do not necessarily mean that the
mortgage product is a no-go. If you have a bigger mortgage it is more likely
in the long run that you�d be better off choosing one with higher charges and a
lower interest rate.
The key is to sit down and calculate the overall costs for each mortgage
product for the period of time that you plan to keep the mortgage.
This will give you a solid basis when choosing the one that is the most
financially attractive to you.
Why mortgage Affordability Matters
More and more mortgage lenders are now changing their criteria when
considering how much they will allow you to borrow. Rather than basing it on
multiple incomes, lenders are now actually looking at affordability.
This is great news for homebuyers, particularly First Time Buyers (FTB�s).
According the Council of mortgage Lenders, FTB�s now get offered an
average borrowing of 3.24 times their income. For most, this is not normally
enough to buy where they want to live.
However, this does not need to be the case. By looking at affordability rather
than straightforward income multiples, lenders can see what a potential
homebuyer can realistically afford. This is a real boon for potential borrowers,
especially FTB�s trying to get that first foot on the property ladder.
Moneyfacts, the independent research company, revealed that five of the top 10
mortgage lenders now look at affordability (also known as ability to
repay) in preference to income multiples.
The good news too is that even some of those lenders who still work on the
income multiples basis have refined their criteria. This means that they may
lend more where there are larger salaries or a bigger deposit involved.
If you are looking to mortgage or remortgage, the most important thing is
to borrow how much you realistically think that you can afford. Just because a
lender
believes that you can afford x amount every month, if you feel that it would be
over stretching yourself, then don�t go ahead with the mortgage.
Free Yourself From Fees!
If you are looking for a new mortgage or remortgage, it is not just the
interest rate that is important. While it looks like you may get a good deal
initially, once fees have been added, it could be a whole different ballgame.
There are around 8,000 home loans out there, so there is a wide choice. When
choosing a mortgage, most people will look at how much their monthly
mortgage repayments will be and then base their decision on that.
However, while this is a valid exercise, you should not base your decision on
which mortgage to take out solely on this figure. To ensure that you
really are getting a good deal, you need to check out what fees you will need to
pay.
These could include one or all of the following: fees for booking,
administration, arrangement and application; valuation or survey fees; and
mortgage indemnity premiums (also known as a mortgage indemnity
guarantee).
And don�t forget to look at what fees you will be charged once you come to
moving your mortgage such as early redemption penalties and exit, sealing
and deeds fees.
The latter, in particular, has recently come under the scrutiny of the Financial
Services Authority (FSA). In June 2006, lenders were warned that massively
increasing exit fees could be unfair. It has asked for justification of these
hikes.
So take a bit of time to check out exactly what fees you will be charged - it
could save you money in the long run.
Article Source: http://www.articlemap.com
More information:
www.cappedratemortgage.co.uk
www.debt-consolidation-remortgage-uk.co.uk
www.5starmortgages.co.uk James
Miller is a freelance writer specialised in consumer
credit, covering topics such as how to deal with bad
credit, mortgages and insurance. He aims to help people
navigate the financial industry.
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