For most of us our mortgage is the biggest and longest term commitment that we have and so getting the best possible deal is a necessity. Understanding the smaller details of a mortgage and how it works will help you get the best deal – so, let’s take a look at what you should ask.
There are so many types of mortgage out there that it can often be hard to make a decision on the type that you require and what’s suitable for your work situation. A good broker will offer you a range of options as well as advise you on what’s most suitable.
The APR is the interest rate and also the other fees. Your broker should be able to calculate this for you and inform you how much you will expect to pay. APR rates cannot be offered on a variable loan as it constantly fluctuates.
It is possible to purchase discount points, these are usually calculated at one per cent of £100,000. Purchasing points reduces the cost of the loan in the long term.
There are a number of extras that add to the cost of the house. Appraisals, reports home surveys and a whole host of other additions add to the expense of the house. A ‘Good Faith Estimate’ (GFE) is should give you a good idea of how much this will all come to.
Most mortgage brokers guarantee the GFE and though they don’t have to, make sure you use one that does.
Can you change from the variable to the fixed rate of interest or do you have to stick with one or the other for a period? If you can this can be a great benefit and if you move when the time is right you can save a lot of money.
Ask if you can repay the loan early and if there is an extra cost to do so. Some loans include a repayment penalty and others waive them after a period into the mortgage. Make sure to ask about this.
Is it theirs to Loan?
Ask the broker if the loans are approved in house or if they need to have them approved elsewhere?
Sometimes loans can be provided very quickly, on other occasions you may not be so lucky. As home loans and house buying is a time sensitive area, ask for a closing date for the loan to go through and how long the estimated turnaround for the loan is.For home owners, they will be asking, can I sell my house quick,and a slow loan turnaround time may see the home disappear from your grasp.
Yield Spread Minimum
The yield spread minimum can add to the cost of the loan and you should certainly as the broker about it. The yield spread minimum is essentially the commission that the underwriter will receive from the loan. It of course will increase the cost of the loan to you. However, it can be discussed and negotiated and as a result it is possible to lower the cost of it to you. This will lower the overall cost of the mortgage.
Cormac Reynolds is a content writer and link builder with and interest in property and finance. He writes for YouSellQuick.co.uk a UK fast house selling company.