If you want a mortgage loan, the first step is to do an extensive study in the market so as to get an idea or the feel of the market. There is a plethora of financial institutions, banks, private moneylenders, franchisees, brokers and mobile lenders, and so on. Big financial corporations and banks usually have their own products and rigid lending rules. They may and may not fit every individual need. They have generally broad based network. They usually target big borrowers such as industrial houses, multinational businesses, real estate dealers, colonizers, and so on.
The private moneylenders are more flexible than the banks and big financial corporations. Their targets are small local borrowers and their loan menus are for the commoners. But even small moneylenders, due to their size and limitations, cannot customize their mortgage loan offers for every individual need. The best course for small mortgage borrowers is to contact the brokers, the franchisees or the agents who liaison their work with scores of big and small lenders.
A mortgage broker is like a big departmental store where there is something for every one. They have hundreds of loan plans and products collected from the wide-ranging market. They receive the same commissions from the lenders, no matter what lender you choose. They can save you time and energy by literally searching and analyzing the multitude of mortgage loan products with their software in a matter of minutes and also short list a few competitive options and you can select the ones that best suits your needs. They do not need to twist and turn just one or two offers to push them through the clients. You must however try to settle for a broker who is reputed and has a long and varied experience.
There may be lender-to-lender variations in interest
rates, preliminary deposits, evaluation fees and so on.
You may need around 3% of the value of the property saved as a deposit
besides a savings history of the past 6 to 12 months.
If you need the mortgage loan for buying a house, you will be pleased to know that the federal and the state governments pay certain amounts of grant as incentives to the first time home buyers. This is done to offset the burden of some taxes. The application for a grant must be made within 12 months of the completion of the construction or settlement of the home. Assistance will not be means tested. There is no tax on the grant. Your lender can help you get the grant with stamp duty concessions.
The total amount of a loan that you can borrow depends primarily on your credit history, present income and savings. It is always advisable to set your financial record in order quite some time before you approach any moneylender for loan. Get copies of your credit report from the credit assessment agencies and study them thoroughly for any factual or inadvertent errors. If you come across any dispute, report the same and get the corrections duly incorporated in your record.
You may also have to pay the lender’s application fees, government duties, mortgage insurance if you are borrowing more than 80% of the property value, inspection costs and so on. It is always a good idea to get an estimate of the upfront payments that you need to make.
Apart from the broker/money lender’s assistance, you should also get expert counseling on all the nitty gritty of the mortgage loans including the rates of interest whether fixed or variable, monthly repayments, APRs, closing costs and so on. A little amount of caution and money spent may go a long way in forestalling the unexpected problems that may confront you in the future.
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