Foolproof Tips in Finding a Reputable Home Loan Broker

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Mortgage Broker PerthWhen you are ready to buy a home, find someone who can loan you money. Unless you’re fortunate to buy a home outright, you will need a home loan broker. Look for one that will offer you the best deal, but settling on a home loan broker can be difficult.

It was easier in the old days to choose a lender, since options were limited. Unlike in a large city, you only had one or two banks to choose from. Today, countless lenders will compete for your attention. How can you find a lender who will offer the best deal to get the most of your money?

With simple principles, you can avoid financial setbacks. Find a lending company that offers a great deal. Let these tips guide your search to get a low-rate mortgage on favourable terms.

Financial Institutions

Start with your financial institution. Your bank or credit union has mortgage lending. Often, they provide discounts to current customers. If you end up not choosing their services, it’s a good head start.

Referrals

Your friends and acquaintances can be helpful when you are looking for a home loan broker. Ask if they can recommend one with excellent service. Get a referral from someone you trust.

Interest Rates

Consider the interest rate on your loan. Remember, you are buying a home with a mortgage.

Compare:

Take out a $250,000 mortgage with a 5.5% interest rate and a term of 30 years. You will pay more than $500,000 by the time your loan is paid off.
Find a loan with a 4.5% rate; you will only pay about $450,000. Imagine what you can do with an extra $50,000!

Therefore:

Find a loan with low interest rates as possible.
Hold back until interest rates drop.

However, interest rates do fluctuate. You could put off applying for a mortgage, only to find interest rates have gone up.

Additional Fees and Charges

Some home loan brokers will offer low interest rates to entice customers, only to tack on additional fees and charges. You will end up paying more. Choose a loan with lower interest rates, and reasonable fees and charges.

Closing Costs

Include closing costs when you figure out how much to borrow. These costs are related with completing the sale, around $5,000 or more. You can either:

Pay these upfront, or
Have the amount bundled into your mortgage.

However, if you choose the latter option, you will pay more. These costs will be added to your principal loan where interest rates apply to the total loan.

Loan Terms

Take into account the term of your loan. Generally, a shorter term means you will pay less overall, but you will pay higher monthly payments.

Consider:

A 30-year mortgage for $250,000 at 4.5% will cost you about $1260 a month, for a total of $450,000.
A 20-year mortgage for the same amount will have a monthly payment of nearly $1600, for a total of $380,000.

If you can afford to pay more each month, it makes sense to opt for a shorter term. While 30-year mortgages are still the standard, most lenders also offer 20, 15, or even 10-year options.

Recommendations

A real estate agent could also recommend lenders. Most agents are familiar with the local real estate market and have worked with various lenders. They could lead you to a home loan broker that offers excellent service with value for your money. However, you should not base your decision on a person’s recommendation.

Meet in Person

Before you make a decision:

Be sure to meet a mortgage broker in person.
You can ask questions.
Make sure all concerns are addressed.

While there are numerous lenders who want to get your attention, you should talk to them to know more about what they could offer. A personal connection with a lender should be a routine.

Buying a home is a complex process. Several decisions have to be made. Sorting through home loan brokers takes time. Assess your options carefully and make the right choice.
Before you make a decision:

Be sure to meet a mortgage broker in person.
You can ask questions.
Make sure all concerns are addressed.

While there are numerous lenders who want to get your attention, you should talk to them to know more about what they could offer. A personal connection with a lender should be a routine.

Buying a home is a complex process. Several decisions have to be made. Sorting through home loan brokers takes time. Assess your options carefully and make the right choice.

 

 

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