The way real estate prices are going up these days, buying a house or a piece of real estate with ones own saving has become a thing of a bygone era.
But then, there are financial tools that can help us get our dream home. And one of the tools that is most frequently used all over the world is mortgage. Once we have decided which bank to take the mortgage from, we then need to take the next step- that is to decide on the details.
We must choose from the plethora of mortgage options and rates that suit our needs the best keeping into account our repayment abilities. You should compare the different rates other hidden costs like valuation fees, booking fees and other legal fees charged by different bankers before applying for the mortgage.
For a layman the first encounter with the world of mortgage and banking may turn out to be quite confusing. There are chances of losing out on lucrative offers if an inexperienced person tries to handle the dealing. Then the question arises - what does a person having no knowledge in this field do?
The answer is to get help from a mortgage broker who will take you through the perilous roads of mortgaging and simultaneously keep your best interests in mind.
You can contact a mortgage broker through the bank you are dealing with or you may appoint one yourself. However, if you opt for the first option you won't have to pay for the broker's commission as the broker will be paid by your banker.
The advantage of having an mortgage broker manage your dealings is that firstly you will get help of a personalized solution to all your mortgage related problems and secondly you will get information about different deals that we generally are not even aware of. And in the process you may end up saving a lot of you hard earned cash.
You should complete your ground work before you set up an appointment with your broker. You are expected to have information, like financial and employment status, and all other required documentation ready as this will drastically speed up the process.
After all these steps, the next phase will be to zero on the type of mortgage you will like to avail of. There are broadly three types of mortgages- fixed mortgages, tracker mortgages and flexible mortgages. These mortgage types have their own set of advantages, interest rates, repayment options and obviously, disadvantages.
Fixed mortgages: In this type of mortgage there are mostly no upfront costs involved (depending on your lender). But the rate of interest that you agree to pay for the stipulated period of years will never go up above a certain specified level even if the market rate goes up. However, the upside is that the interest rate will fall down if the market rates take a dip.
Tracker mortgages: This type of mortgages offer help when someone is starting out on a mortgage by reducing the amount payable in the first few years. The rate of interest depends on the base rate of the Bank of England at the start of the mortgage.
Flexible mortgages: the rate of interest varies with the variable market rate and is at the discretion of the lender.
These are few of the many of the plans that are rolled out everyday by the banks to lure customers.
Once you have decided from the plethora of options available to you your broker will fill up a form for you stating the rates you agree to pay and your details. Then your broker will post these forms after reviewing them & removing any mistakes. Bankers have a stipulated time, after which they will not agree to the rate quoted to you. So if your posts reach within that stipulated time, a hike in rates rise won't affect you.
After all this has been done all you have to do is to wait to see whether the mortgage is accepted ,and if the answer from your lender is in affirmative then the house of your dreams can finally be yours.
