Securing a new mortgage on the most favorable terms possible is all about market knowledge. And that’s what this site is all about. We cover every aspect of mortgage loans, from information on current mortgage rates and terms to details of the different types of mortgage lenders and brokers. If you are looking for information and help on a new mortgage, you can find it right here.
We can explain the advantages and disadvantages of mortgages of all kinds. You can learn about the different types of home loans, including fixed rate and adjustable rate mortgages, and about the different functions which each type of mortgage lender performs. Most importantly, we have information on current rates for both refinancing and new home purchases, to help you arrange the most appropriate mortgage for your circumstances and your budget.
One of the more important things to remember when shopping for a mortgage is that home loans differ from almost all other products in one critical respect—their price depends on the borrower. And that’s not all—the terms and suitability of a mortgage depend on the borrower too. That’s why there is really no such thing as a ‘good’ mortgage or a ‘bad’ mortgage as such. The ideal mortgage is one which is the most appropriate for a particular person or persons, in a particular set of circumstances and at a particular point in time.
When arranging a new mortgage, the type of loan you choose will have an important bearing on the total amount you eventually repay. However, your choice will be governed by a range of factors, particularly whether your current income will allow you to choose a mortgage which provides you with the lowest cost option in the long run.
There are several types of mortgage lenders, and they are generally classified according to the functions they perform in the market. Those functions can vary from providing lines of credit to arranging mortgages for the purpose of on-selling. When you are looking for a new mortgage, it pays to know where your mortgage lender is coming from.
The job of a mortgage broker is to assess the financing needs of each prospective borrower and to match the borrower’s loan requirements with the most appropriate lender and mortgage product. Brokers are therefore ostensibly independent of the lenders they deal with, but sometimes that independence can be more apparent than real.
Advertised mortgage rates are designed to attract attention, not to inform. They are invariably the absolute minimum rate which the lender would offer on the day, and then only for the lowest risk borrower offering a very attractive proposition. Sometimes, lenders will advertise rates which they have no intention of offering anyone, just to get you in the door.
The only mortgage quotes which matter are those which a mortgage lender gives to you. All other quotes are meaningless, including those which you see advertised daily. Importantly, a quote is not a quote until it is locked, a fact which many borrowers learn too late in the process.
In general, it is best that you lock in a mortgage quote at the point at which your bargaining power is greatest. This will almost always be furthest out from the prospective mortgage closing date. Lenders have a better idea of your bargaining power than you may realize, and they will be quite happy to let you get advanced in the loan application process before locking in a rate, and happier still if that occurs when you have reached the point of no return.
Mortgage quotes operate on the principle of ‘the better the input, the better the output’. Don’t be tempted to withhold adverse information from a broker in the hope that it won’t be discovered, or that if it is, it will be too late to matter. Some brokers look for reasons to modify mortgage quotes late in the process, so by withholding relevant information you could be gifting that reason to them. It will then be very difficult to protest at a significant increase in the mortgage rate or points quoted to you, and even more so if a deadline for closing the deal is looming. Early, full and open disclosure is best.
Obtaining a mortgage quote online is one of the most efficient ways you can shop for a mortgage. Lenders who post their mortgage rates online, even though those rates might only apply to borrowers with high credit scores and other favorable factors, create a benchmark against which borrowers are able to see changes in market rates from day to day. Shopping online for a mortgage also enables you to cover a lot of ground in a short space of time, which widens your prospective pool of lenders.
Use the internet to your advantage in securing the most competitive mortgage quote on the most favorable terms available in the market, whether that be through a mortgage broker or otherwise.
There are many factors to consider when seeking your new mortgage, most of which are related to you. In fact, the choice of a lender and type of home loan come quite late in the process, well after your consideration of your own circumstances and requirements. So you need to have a good think about these before focusing on matters such as lenders, rates, margins, points and fees.
The principal inputs in arranging quotes for a new mortgage are:
There are some traps for the unwary in entering into home loan agreements, and given that mortgages represent the most significant financial commitment that most people ever make in their lifetimes, the costs in getting it wrong can be substantial.
But don’t worry. There are many tips for navigating the maze of the mortgage market, and now that you’re here, help is right at your fingertips.