How to Choose the Right Mortgage for You

The most difficult but important part of purchasing a new property is choosing the right mortgage for you. A mortgage is a loan that can be used to buy a home, with the borrower reimbursing the lender in regular payments. 

To ensure that the borrower fulfills their part of the agreement, their new property acts as collateral. How much you need to pay towards your mortgage depends on the type of mortgage you choose, its term (i.e. 15 or 20 years), and what interest rates are like at the time. 

It can be incredibly difficult to decide upon a mortgage, especially for first-time buyers with little experience in the market. 

To help our readers out with this dilemma, we thought we would share some of our top tips for picking the right mortgage for you. Keep reading if you’d like to find out what they are.

Compare the Different Types

There are 4 different types of mortgages: fixed-rate, discount, tracker, and variable (which is also known as floating). Each has its own advantages and disadvantages, so you should carefully evaluate and compare before settling upon a deal. 

Fixed-rate mortgages have interest rates that remain the same for a set amount of time. These are a popular option among buyers, as they are consistent. 

Discount mortgages have an interest rate that is fixed at a set amount below the lender’s SVR. So, if the lender’s SVR rate goes down, then your interest rate will go down too – and vice versa, unfortunately. Tracker mortgages calculate interest using the Bank of England’s base rate. 

Finally, we have floating/variable mortgages. The interest rate on these loans can fluctuate with the market or an index, so you can save money when rates are low, but be charged more when rates are high. 

Fixed-rate mortgages and floating mortgages are usually the most popular types, with the former being a safer option and the latter being for those who are a little savvier and more willing to take risks. 

There are many options that you would need to compare but there are two in particular which may work. 

For example, there are plenty of mortgages that a company such as DBS Home Loan offers to their customers. These include fixed rate mortgage loans, floating rate mortgage loans and bridging loans for HBD and private properties. 

It’s worth checking them out to see how you could benefit from a financial strategy with any of these loans and get yourself on the property ladder by doing it sensibly. 

There are websites that provide plenty of options but also advice on what you should be looking for when evaluating your mortgages. 

We recommend doing a little more reading into the subject and figuring out from there what would be best for you and your current financial situation.

Use Repayment Calculators

Source

One of the most common mistakes that people make when they first enter the property market is investing in a mortgage that they can’t sustainably afford. We never know how our financial situation is going to change between a month, a year, a decade. Your partner or you could be made redundant. You might have some children. You could even be hit by unexpected insurance costs. 

As anything can happen between now and the end of your mortgage, it’s best to have enough leeway that you can survive a financial disaster and still be able to pay your bills at the end of each month. 

This is where a mortgage repayment calculator can come in handy. These nifty little tools can figure out how much your repayments would cost at different interest rates, providing you with a better insight into what you can afford now and into the future.

Evaluate Deals on the Market

There are thousands of mortgage deals on the market these days. There are good ones, bad ones, great ones, and absolutely terrible ones. Obviously, you’ll want to find great mortgage deals – but these can only be found with some research and hard work. 

Don’t immediately go for the first search result you find on Google. Instead, try shopping around a little bit. There are loads of fantastic comparison websites on the internet that can help with this. Just make sure you are looking at unbiased reviews before making your final choice. Some websites get paid commission for every customer they send a business’s way.

Hire a Mortgage Broker

It can be difficult to wrap your head around mortgages. Not only are there loads of different factors to consider, but also the terminology can be quite intimidating for people who are new to the property market. That’s why hiring a mortgage broker can be immensely helpful.

A mortgage broker is somebody who provides advice and guidance when you are seeking a mortgage from a lender. They will consider your individual circumstances and seek out the best deals for your financial situation. If you ever need anything explained, they will also be there to help you out. 

What’s more, sometimes you can’t access certain mortgage deals without going through a broker. Do be mindful that some brokers only work with a select number of mortgage lenders. This means they won’t be able to tell you about other deals on the market that might be better.

We hope that you have found this article insightful! Make sure to research, compare, and seek out advice so you can find the right mortgage for you.

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What Fees Come With Selling a House?

If you’re finally selling your home, your mind is probably racing with the money you’ll get from your property.  Unlike renting, or leasing, owning a home and paying off a mortgage is all based on the hope that you’ll either be able to pass it down in the family or sell it and make some profit.  Unfortunately, selling your home isn’t entirely about the profit: there are more than enough fees and costs that come flying your way!

Here are the top charges to prepare yourself for.

Taxes

The largest tax you’ll have to worry about is the excise tax.  A type of sales tax, this tax charges you for a portion of the income you make off of your home.  Although it won’t be much compared to how much money you get from your house, it’s still enough to weigh you down if you don’t plan for it.

Escrow Fee

Although it would be nice if the buyer could hand the money directly to you, unfortunately, it doesn’t work this way most of the time.  Instead, the escrow fee occurs when the money trades hands through an intermediary who ensures the deal goes smoothly.  They take care of checks, ensure that any funds are transferred safely, and help the value go on without anyone getting shorted.

Agent Commission

If you decide to use an agent to sell your home, you’ll have to pay them a portion of your earnings.  Most agents charge between three to six percent and take it out after the sale is completed.  Although you can avoid this fee by not hiring an agent, they make the deal go on without a hitch and are highly recommended.

Remaining Mortgage

In most instances, people who sell their homes don’t own them in their entirety yet.  Instead, they still owe a large portion of the home’s worth from when they bought it.  This portion has to be paid off immediately and should be considered when using a seller closing costs calculator.

Title Insurance

Although who ends up paying for title insurance can vary from home sale to home sale, it’s the seller paying it more often than not.  This process protects owners and lenders from any damage or property loss they’d suffer from liens or defects in the property’s title.

Inspection

Every home needs at least two inspections during a sale: one by the seller and one by the buyer.  This inspection notifies you if anything should be worried about or looked at and gives you the chance to make some repairs before a buyer arrives.  You do have to disclose anything your inspector finds, so you must make tangible changes if anything is wrong with the property.

All of these costs may seem a little overwhelming to have dumped on you when you just came into some money, but they’re all necessary.  The only way these costs may get worse is if the buyer tries to haggle and having you pay some of their closing costs too, which unfortunately happens pretty often!

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