Home Mortgage – Can You Still Get Them at a Good Rate?
Have you tried to get a home mortgage recently, and discovered that the numbers of options available are extremely limited? If you have, you’re not alone. Many people are now struggling to find a mortgage that they can switch to, so as to lower their monthly outgoings, or, a first time home buyers mortgage so they can get on to the first rung of the property ladder. So what can you do?
Much of the public will say that it’s not before time that mortgage companies were tightening up the criteria for lending, but the big problem is that most of the people they’re causing problems for are just trying to get their first home; which seems to be a little unfair, doesn’t it?
Many of them have been trying to save during the economic gloom of recent years, and have found that the money they thought they were going to have to have for a deposit, is now well short of the levels that the mortgage companies are taking before they’ll approve the home mortgage. This all means that the buyers either have to wait for a few more years to raise the additional money for the deposit, or they have to borrow.
The problem with borrowing, however, is they have to have the capital to put up against the loan; they don’t already have a home with which to do it, so borrowing from many loan companies becomes awkward.
What about borrowing from family? It’s a nice thought, but, few families, especially these days, have the kind of money that’s going to be needed to reach the level of deposit that the mortgage companies are going to be happy with.
Ok, let’s say you did manage to get the extra money, and can start looking for a home mortgage; what then?
There are several kinds of mortgage that you can get, and the amount you’ll repay each month depends a lot on which you opt for. If, for instance, you decide that you’d like to know exactly how much money you’ll be paying out, a fixed rate home mortgage will be the best option for you. If you know that interest rates are likely to fluctuate, and are banking on them heading down, you can get a floating rate that will track the interest rate; plus a ‘buffer’ of around one or two percent.
While both of those types of mortgage clearly have advantages, they also have one or two disadvantages.
If your home mortgage is tracking the base rate, you’ll never be too sure, from month to month, exactly how much you’re going to have to put aside. One month you may be within your comfort zone and the next, after an interest hike, you may be struggling to find the extra cash for your payments.
If you have a fixed rate you may discover that you’ve fix the rate at what you thought was a good level, only to have it fall further the next month; and you may be stuck at that higher level for years. After enjoying years of certainty as to what you’re paying each month, you may find that interest rates have risen dramatically over the years, and you now have a massive increase in repayments to ‘look forward’ to.
If you’re looking for a first time home buyers mortgage, you may find that even those options have been restricted for you now. Some companies still offer special incentives to help get you into your own home; so it’s not all doom and gloom when you’re looking for a first time home buyers mortgage.
Have you been looking for a home refinance mortgage? If you have you may find that the mortgage company you’ve used in the past is tightening the requirements for you, too. Having an existing mortgage with them may work to your advantage, so they would be the company to contact first for your home refinance mortgage.
If you’re looking to move to another company; perhaps to release some equity; get a better interest rate, while keeping the repayments at the same level to get the home mortgage paid off sooner; you’ll find that deals are available, but they may want more information from you than you had to provide for your original mortgage.
If you shop around and; are ready to put more money in as a deposit; or, in the case of the self employed, are able to show enough sets of accounts to prove you earn enough to meet the repayments; you’ll find that you can get a new home mortgage; find a first time home buyers mortgage; or, get a home refinance mortgage to take advantage of better interest rates, and maybe take out a lump sum to pay for other things, too.