http://www.articletrader.com/ Articles at ArticleTrader en-us http://www.articletrader.com/finance/mortgage/beware-the-pitfalls-when-looking-for-cheap-mortgages.html http://www.articletrader.com/finance/mortgage/beware-the-pitfalls-when-looking-for-cheap-mortgages.html Wed, 29 Oct 2008 00:00:00 -0500
Watch out for cheap mortgage traps

When taking out a mortgage, you put down a deposit on the amount you are borrowing. The loan-to-value (LTV) percentage is key here. The LTV is basically the amount of money you borrow against the property value, expressed as a percentage of the property value. So, a high LTV mortgage means that mortgage lenders need more insurance against the borrower defaulting on payments. This insurance takes the form of Higher Lending Charges (HLCs), which is the first thing to look out for when searching for a cheap mortgage. The higher the LTV, the more likely you are to be subjected HLCs and the more the HLC will be. HLCs are calculated as a percentage of the portion of the loan above 75% of the property value, which can add up to thousands. It is important to consider whether or not you will have to pay HLCs when comparing mortgage products.

The next potential hidden charge that could blight your cheap mortgage deal is the Early Repayment Charge (ERC). ERCs are imposed by a mortgage lender if you decide to repay your mortgage early, to cover the interest they will lose, or if you decide to switch to another mortgage product or another lender. ERCs are calculated as a percentage of your original loan, a percentage of the outstanding balance, a percentage of the sum repaid, or a set number of months’ interest, so it is important to know which method is used to work out how much you would have to pay. If you think that you will want to repay your mortgage early, or switch mortgages, you should work out if the ERCs would prevent you from saving any money.

The final payment you can fall prey to is Mortgage Payment Protection Insurance (MPPI). It is always advisable to take out MPPI, as with a policy like this your mortgage payments are covered for a specified period of time if you become ill, injured or unemployed. A common mistake many people make, however, is to rely too heavily on their MPPI, or not know the circumstances under which their MPPI does not apply. For example, most MPPI policies do not cover payments of more that £1,500 per month and many do not allow you to claim cover before 60 days have passed since you took out the policy. Periods of unemployment that could have been predicted, such as those due to pre-existing medical conditions, are also not often catered for. So, when searching for a cheap mortgage, it makes sense to search for cheap but effective MPPI as well, and always read the small print.

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Steven Clarke – Marketing Manager – Cheap Deal Mortgages – We help you find cheap mortgages through our advice service which compares all mortgages in the UK market to ensure you get the cheapest mortgage deal.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/get-a-cheap-deal-when-remortgaging-your-property.html http://www.articletrader.com/finance/mortgage/get-a-cheap-deal-when-remortgaging-your-property.html Wed, 29 Oct 2008 00:00:00 -0500
Staying with a mortgage provider often does not benefit you financially. Mortgage lenders need on a base of long-term customers to pay them a steady income, which allows the lender to attract remortgage customers with cheap mortgage deals. Put simply, in some cases, loyal customers are paying more, so that remortgage customers can pay less.

Are you ready to switch to a cheaper mortgage?

Here are a few signs that it may be time to ditch your current deal and find a cheap mortgage to start saving money:

1) When you want additional funds. Many people change to a cheap mortgage in order to release extra cash to improve their homes, such as build a new kitchen or an extension. Others find that a cheap mortgage deal can get them out of sticky financial situations, such as car problems that necessitate paying out large lump sums on a new vehicle. Unexpected turns in life can lead to financial strain, but remortgaging can with cash flow problems.
2) If your mortgage is no longer compatible with your lifestyle: becoming self-employed, changing jobs or getting a promotion can alter your monthly income drastically. You may require a mortgage that will allow you to pay off larger sums and then take payment holidays, or find a cheaper mortgage in terms of monthly repayments.
3) When your property’s value increases: properties can increase in value, either due to changes in the markets or your own improvements to it. Remortgaging can help you take advantage of this increase, meaning that you can get the best value for money from your property.

A cheap mortgage can be relatively easy to come by, with a little research and by using the resources available. The first thing to do is approach your current lender and ask if they can offer you a more competitive deal. Don’t stop there, though; shop around for a great deal. You could employ the services of a mortgage broker, but if you are going to do this, take into account that they may charge a fee for their services, and they may be restricted to supplying quotes from a limited panel of lenders, so look into your broker’s credentials before using them.

Alternatively, you can use online comparison services to compare cheap mortgage quotes, which can save a great deal of time, take the stress out of the mortgage market, and can all be done in the comfort of your own home.

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Steven Clarke – Marketing Manager – Cheap Deal Mortgages – We help you find cheap mortgages through our advice service which compares all mortgages in the UK market to ensure you get the cheapest mortgage deal.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/finding-a-mortgage-broker-if-you-have-credit-problems.html http://www.articletrader.com/finance/mortgage/finding-a-mortgage-broker-if-you-have-credit-problems.html Wed, 29 Oct 2008 00:00:00 -0500
When you carry out a search to compare best mortgage quotes on the internet, you will likely be deluged with adverts for mortgage brokers who specialise in ‘bad credit’ or ‘sub-prime’ clients. These will typically charge higher fees than regular mortgage brokers, because they appear to be offering a service that others would not. Customers assume that these are the only brokers who will touch them, and end up paying the higher fees because they think there is no choice in the matter.

Sub-prime mortgage brokers – what to consider

It is worth knowing that most regular mortgage brokers will also work with sub-prime borrowers. Not only that, they will typically offer the same fees that they charge everyone else. You may have to pay more for your mortgage itself, and the type of deal you can get may be more limited because of your financial circumstances (past or present), but you should not have to pay over the odds for the advice and you can still go through a reputable mainstream broker.

This simply means that searching for a mortgage broker if you have a poor credit history should be much the same process as if you did not. Word of mouth is often a good place to start, and if you know someone who can make a good recommendation based on their own experiences then this can be invaluable. Other than that, the Internet is a great resource for finding brokers in your local area. By all means compare best mortgage quotes themselves at the same time – there are several search sites that will do this for you – but bear in mind that a broker will be able to secure deals that you will not on your own.

Finally, there are things you can do to improve your credit score with the lenders. Some are as simple and apparently unconnected to your finances as making sure you are on the electoral roll. Access to too much credit – unused bank accounts and credit cards – can also affect you adversely. Keeping up regular payments on your existing credit card debts will obviously make a difference, as will stability in your living arrangements and in your job.

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Steven Clarke – Marketing Manager – The Mortgage Broker – Providing a mortgage comparison of the whole mortgage lender market to find you the best mortgage loan rates. Visit the Mortgage Broker to get a quote on the type of mortgage you want.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/the-many-advantages-of-using-a-mortgage-broker.html http://www.articletrader.com/finance/mortgage/the-many-advantages-of-using-a-mortgage-broker.html Wed, 29 Oct 2008 00:00:00 -0500
This much you would be able to do on your own, given the time and the right mortgage comparison websites. However, this can be time consuming and you will then have to follow up your initial search results in person, one at a time, on the phone or on lender’s website. A mortgage broker will be able to do the same more quickly, sometimes using specially designed software to search the entire market for you. In addition, unless you know a lot about the different types of mortgage, you may find yourself out of your depth very quickly – adding more time and frustration to what can be an already fraught job.

These are not the only advantages. If you are looking to arrange your own mortgage, you will effectively be walking off the street into a bank or building society and asking the lender to give you a six-figure loan. Needless to say – particularly in these belt-tightening times – many may turn you away. Whether their decision is warranted or not is neither here nor there; many just will not want to take what they perceive as an unnecessary risk, and their criteria for deciding that might be very different to yours.

Time, money, information: how mortgage brokers can help

Every lender you approach will require you to fill out their series of application forms – a time-consuming business. Most of these will come to nothing, as you only need one mortgage but may have to approach many companies in the course of your search. A mortgage broker, on the other hand, will ask you to fill out their forms only once. When they have this information, they can use it to search for different quotes.

They will also have worked to establish relationships with providers, and will know which are most likely to give you a mortgage for your particular financial and life circumstances. Because they have a track record with their lenders – and a reputation they wish to preserve – it makes no sense for them to send lenders prospective borrowers who are likely to default on their loans.

This means that the lender is likely to trust the broker far more than they would trust you if you contacted them directly. Once the broker knows enough about you, it is their job to fight in your corner to convince the relevant lender that you are a good match. Not only this, but they will compare best mortgage deals across the whole market, including some deals that are available exclusively to them as a mortgage broker, that you would not have otherwise found in your own research. A mortgage broker can locate exclusive deals and then secure them on your behalf.

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Steven Clarke – Marketing Manager – The Mortgage Broker – Providing a mortgage comparison of the whole mortgage lender market to find you the best mortgage loan rates. Visit the Mortgage Broker to get a quote on the type of mortgage you want.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/finding-cheap-mortgages-whatever-your-situation.html http://www.articletrader.com/finance/mortgage/finding-cheap-mortgages-whatever-your-situation.html Mon, 27 Oct 2008 00:00:00 -0500
This short guide breaks down what kinds of mortgages are available to you, and once you know which you want, you are one step closer to finding the best deal for you.

Types of cheap mortgage to consider

Almost all mortgages fall into one of two categories; they are normally either fixed rate mortgages or variable rate mortgages. Part of getting a good value mortgage depends on knowing which fits your personal requirements best. With a fixed rate mortgage, your lender agrees to keep the interest rate on what you borrow the same for a set period of time. With variable interest rate mortgages, the interest rate you pay can change over time. Before getting a mortgage, it is probably best to decide which of these two types suits you best.

The next distinction between mortgages is that between repayment and interest-only mortgages. With repayment mortgages, you pay off some of the capital (the amount you borrowed) and some of the interest on what you owe, every month. This means, as long as you have kept up repayments, that you will own your property outright by the end of the term. Alternatively, there are interest-only mortgages, where you only pay off the interest on what you borrowed every month, leaving the capital to pay off at the end of the term. This means that your monthly payments will be lower, but you will have to come up with a large amount of money at the end of the term to own the house. Either of these options could provide you with a cheap mortgage, depending on your income and how you think your future will pan out.

Once those options are decided, there are a number of different mortgage products on the market that may save you money. If you are looking to buy a property that you will rent out to tenants, a buy to let mortgage is what you are looking for. Perhaps you feel you will need to alter your repayments due to a varying income? In that case, you might wish to look into flexible or lifestyle mortgage products to find a cheap mortgage. With these, you can pay more when you have more money available, or take payment holidays when you are struggling to meet repayments. You can even get a cheap mortgage by choosing one with a longer term than the standard 25 years, which spreads the repayments over a longer period of time, reducing monthly payments.

There are cheap mortgage products within all of these sub-categories, and you can start your search for a great deal today. You can enlist the help of a mortgage broker to help you in your search, or use a mortgage comparison website to start looking for your perfect cheap mortgage from the comfort of your own home.

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Steven Clarke – Marketing Manager – Cheap Deal Mortgages – We help you find cheap mortgages through our advice service which compares all mortgages in the UK market to ensure you get the cheapest mortgage deal.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/tracker-rates-options-your-mortgage-broker-should-present.html http://www.articletrader.com/finance/mortgage/tracker-rates-options-your-mortgage-broker-should-present.html Mon, 27 Oct 2008 00:00:00 -0500
Due to the current economic turmoil, it is particularly relevant to discuss with your mortgage broker not just what the best deal is now, but how things are likely to change in the future.

When it comes to rates, the options are fixed-rate or a tracker mortgage. Your mortgage broker will be able to hunt around and find the best deal for you in either case. However, it pays to know a little in advance when comparing best mortgage quotes. A fixed-rate mortgage is one in which you will pay the same amount for a fixed period of time (typically two, three or five years) – great if you want to make the same monthly payment without worrying that circumstances beyond your control might push rates up.

On the other hand, a tracker mortgage reflects interest rates, which means that if rates go down, so do your payments (though equally, your payments will rise with the interest rate). Trackers have seen a huge increase in popularity in the last year, as customers suspected that, as a result of the global economic problems, interest rates would stay the same or fall further.

Tracker mortgages: Bank of England or standard variable rate?

When you are comparing tracker mortgage quotes, there is one important question to bear in mind: what are they actually tracking? This may seem like an obvious question – tracker mortgages are directly linked to the interest rate (plus a fixed difference of a percent or so for the bank’s profit) – and so the amount you pay on a monthly basis rises and falls as the interest rate does. However, although many of these track the Bank of England’s base rate of interest, others follow the bank’s own internal base rate – their Standard Variable Rate, or SVR. This is also linked to the Bank of England’s base rate, but can vary due to a number of factors.

The thing to remember is that, although any changes in the Bank of England’s base rate may be reflected in the SVR and therefore passed down to you, they do not have to be. There may be a considerable lag in the time it takes for you to benefit from any falls (sadly, the same is not true of the rises, which tend to work their way through the system considerably faster). One crucial question to check with your mortgage broker is therefore whether your tracker follows the Bank of England’s base rate or the mortgage lender’s SVR. If you feel (like many people at the moment) that you would benefit not only from the Bank of England’s current relatively low base rate but also the likelihood of further cuts in the future, then you need to make sure you know what sort of tracker you are buying. Plus, if you are on an SVR, now may be the time to consider switching to a better deal if you can.

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Steven Clarke – Marketing Manager – The Mortgage Broker – Providing amortgage comparison of the whole mortgage lender market to find you the best mortgage loan rates. Visit the Mortgage Broker to get a quote on the type of mortgage you want

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/why-not-all-mortgage-brokers-are-equal.html http://www.articletrader.com/finance/mortgage/why-not-all-mortgage-brokers-are-equal.html Mon, 27 Oct 2008 00:00:00 -0500
There are two types of mortgage broker. Some that deal with the ‘whole of market’, meaning they will compare best mortgage quotes across the entire market to find the cheapest one for you. These are independent brokers and will very often be able to get you the best deal, simply because they are working with a bigger range of products.

Other mortgage brokers are ‘tied’, meaning that they only work with one bank, building society or mortgage lender. Others, called multi-tied brokers, may choose from a ‘panel’ of a limited number of lenders. In both cases – though obviously more so with the first – you can only be offered a fraction of the full range of options that are out there.

One further thing that is worth noting is that FSA regulation allows some multi-tied mortgage brokers to call themselves ‘whole of market’, provided that they periodically check to see whether there are any competitive new deals around. Make sure you know what they can actually offer, because many of the best deals may be missed as they are only around for a very short time.

Mortgage brokers: set fees or commission basis?

How you pay your mortgage broker will depend partly on what they are offering – and who they are arranging the mortgage with – but there are two main ways: set fees and commission. Tied brokers will often be paid by commission.

Some brokers will also offer a combination of the two. Fee-based mortgage brokers have become much more popular in recent years. The FSA regulations mean that brokers have to be able to justify the advice they give you. If they are paid by fee, you are charged a one-off amount for their time and work – sometimes an hourly rate but often simply a flat amount (perhaps a few hundred pounds, and certainly no more than 1% of the mortgage amount). This can usually be added to the mortgage itself. However, if they are paid by commission, you pay nothing up front and their fee comes from the mortgage company they arrange your deal with.

The attraction of fee-only brokers is that you know the advice they give you when they compare best mortgage quotes is impartial – they cannot recommend a more expensive mortgage just because the commission will pay them well. However, if you trust the FSA to do its job, you may find the commission option is cheaper overall; you do not want to be paying fees you don’t have to.

One further option you may wish to explore is finding a mortgage broker who receives commission on the mortgage but will accept a flat fee instead. They may be prepared to offset the commission against the fee, significantly reducing what you pay. Indeed, this actually raises the opportunity of you being paid for arranging the mortgage, if the commission is larger than the brokers fee.

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Steven Clarke – Marketing Manager – The Mortgage Broker – Providing a mortgage comparison of the whole mortgage lender market to find you the best mortgage loan rates. Visit the Mortgage Broker to get a quote on the type of mortgage you want.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/going-it-alone-or-using-a-mortgage-broker-the-choice-is-yours.html http://www.articletrader.com/finance/mortgage/going-it-alone-or-using-a-mortgage-broker-the-choice-is-yours.html Mon, 27 Oct 2008 00:00:00 -0500
If it has been a while since you arranged your last mortgage, you might be surprised at the number of options available. Whereas the only real decision you would once have had to make was between fixed rate and variable, there is now an enormous number of permutations. Wading through these to compare the best mortgage quotes can be overwhelming.

If you do choose to arrange your own mortgage, there are websites that can take much of the work out of it by comparing literally thousands of different options for you. Of course, you will then need to follow the results up yourself, contact the relevant bank, building society or specialist mortgage company and make the necessary arrangements. Even then, however, you may not feel confident enough that you are getting the best deal, and given the sums of money involved you may want some expert advice for peace of mind.

How mortgage brokers can lend a hand

The alternative to doing it yourself is finding a mortgage broker, who will be trained to look at your specific requirements and compare best mortgage quotes across the market to find the deal that is cheapest and most suitable for you. In addition, they may be able to secure particular deals for you that would not otherwise be available if you chose to shop around yourself. Of course, this advice will come at a price – although the advantage you get in better rates is liable to outweigh the cost, especially when you consider the effects of compound interest on a sum of £200,000 or more.

Sometimes you will need to pay a fee up front, whereas on other occasions it is incorporated into the mortgage itself – either by adding the sum to the amount you are mortgaging for, or because the broker is paid by the mortgage company itself in the form of a commission, which is of course then passed along to you in the rates and in your monthly payments back to them: there is no such thing as a free lunch. Note that a fee should only be paid after completion; brokers can ask for it at any time, but it can be problematic if you have already paid and the deal changes before you have signed on the dotted line.

Within reason, then, you can consult more than one broker without financial penalty. This may be advantageous as some mortgage brokers have special deals with certain lenders.

Your mortgage broker should be authorised with the Financial Services Authority (FSA), or must work for FSA-authorised firms, and you should be sure to check this as soon as possible. The authorisation means that they are bound to follow certain rules, which ensure standards of competency and fair treatment for clients.

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Steven Clarke – Marketing Manager – The Mortgage Broker – Providing a mortgage comparison of the whole mortgage lender market to find you the best mortgage loan rates. Visit the Mortgage Broker to get a quote on the type of mortgage you want.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/save-time-when-searching-for-cheap-mortgages.html http://www.articletrader.com/finance/mortgage/save-time-when-searching-for-cheap-mortgages.html Sun, 26 Oct 2008 00:00:00 -0500
Firstly, it is important to know exactly what kind of mortgage will work out to be the most cost effective for your situation. You may be interested in a repayment mortgage, where you pay back money on both the capital borrowed and the interest. Alternatively, you may wish to get an interest-only mortgage, which can free up cash for you now with lower monthly payments. Then there are interest rates; you can go for fixed or variable rates. Maybe, you are looking to let out your property once you have bought it; in this case, a buy to let mortgage is for you. You can save a great deal of time and money by making sure you understand all of these types of mortgage products before you start applying for quotes.

Cheap mortgages: search and compare

Then, it’s time to search the market for a cheap mortgage deal that suits you. There are so many providers out there, offering so many different mortgage products, that it can be difficult to even know where to start looking. In order to navigate the mortgage market more effectively, you may wish to employ a mortgage broker. Mortgage brokers use their skills, expertise and contacts to find mortgages on your behalf; essentially, you simply tell them what you want, and they find it for you.

There are two things to remember with mortgage brokers, however; firstly, some of them charge for their services, so it might be a good idea to find this out before you start, and ensure that a mortgage broker fee does not outweigh the money you might save on a cheaper mortgage. The second important point to remember is that the best mortgage brokers to use are those who are “whole market”; in other words, who compare mortgage products from all lenders, and not just a panel of those who they receive commissions from. This way, you won’t miss any great deals from smaller, less well-known lenders.

If a mortgage broker does not sound like the best option for you, you can use online mortgage comparison to find your perfect mortgage deal. Using online comparison can take the stress out of finding mortgage quotes. You simply enter your details online, stating what kind of mortgage you are looking for, and have a list of quotes for cheap mortgages, all with the click of a mouse and from the comfort of your own home.

To summarise, finding a cheap mortgage does not have to be confusing, expensive or risky; just remember to do your homework first, and let a mortgage broker or an online mortgage comparison service do the hard work so you don’t have to.

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Steven Clarke – Marketing Manager – Cheap Deal Mortgages – We help you find cheap mortgages through our advice service which compares all mortgages in the UK market to ensure you get the cheapest mortgage deal.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/mortgage/top-tips-for-getting-a-cheap-mortgage-deal.html http://www.articletrader.com/finance/mortgage/top-tips-for-getting-a-cheap-mortgage-deal.html Sun, 26 Oct 2008 00:00:00 -0500
Firstly, it is important to remember that you are a customer when it comes to mortgages, exactly as you are when buying any other products. This means that you have consumer choice; you do not have to stick with the mortgage deal you originally took out, or stay with one particular mortgage lender. If you are remortgaging, asking your current lender for a more competitive quote is a good start, but you could and should shop around for a cheap mortgage.

Shopping around means that it is a good idea to do your research in order to compare mortgage prices properly. So, the first thing to remember about comparing mortgage quotes is to look beyond the interest rate. A low interest rate, however tempting, may not lead to a cheap mortgage, once all of the other costs involved have been taken into account. Comparing Annual Percentage Rates (APRs), however, takes into account all of the fees you will have to pay, such as application fees, mortgage lenders valuations and so on. By looking at APRs you will get a better picture of how much a mortgage costs overall, thus providing you with a better way to compare mortgage quotes.

Mortgage deals: tied-in means tied down

Next, it may be advisable for you to look for “tie-ins” when searching for a cheap mortgage. Tie-ins are terms and conditions designed to keep you with a particular mortgage lender, even after the favourable interest rates have been increased.

Typical ways in which lenders tie in customers include charging fees if you switch to another lender within a certain period, or making customers buy insurance policies in order to qualify for lower interest rates. Comparing these conditions, whilst at the same time looking at APRs, will make your mortgage comparison much more accurate.

You can speed up the process of finding a cheap mortgage by using a mortgage broker. Mortgage brokers will search the market for you, and bring you mortgage quotes to consider. Due to their expertise and contacts, mortgage brokers can find you better deals than you might have been able to yourself. There are a few things to consider when using a mortgage broker, however.

Some mortgage brokers charge for their services, so you can either find one that does not, or build their fees into your plans to make sure that you do save money on your mortgage after all. Also, some mortgage brokers are not “whole of market”, meaning that they only compare mortgages from a restricted panel of lenders from whom they receive a commission. Essentially, mortgage brokers can be useful, as long as you know you are using the right one for you.

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Steven Clarke – Marketing Manager – Cheap Deal Mortgages – We help you find cheap mortgages through our advice service which compares all mortgages in the UK market to ensure you get the cheapest mortgage deal.

Source: http://www.articletrader.com ]]>