Mortgage Tips

100 Percent Mortgages

Many people do not have the money for a down payment, but still desire to buy a home. A lot of people are unable to come up with the 5% – 20% down payment that is often required to purchase a home. In this situation, a person might think of applying for a 100% mortgage loan. You can borrow all of the money needed to buy a new home and not have to come up with a down payment if you qualify for a 100% mortgage. Generally, a person needs good credit to take out this type of loan, but it doesn’t have to be perfect.

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Shared Ownership Mortgages

Despite the fact that there are ways for people to get loans to buy homes, some people cannot obtain a conventional mortgage. You might not qualify for a regular mortgage because of various factors, including your income to debt ratio and your credit rating. Shared ownership mortgages can help people who want to own a home but just can’t manage it on their own.

A shared ownership mortgage allows for such financial schemes as partial purchase/partial renting. Housing associations of particular countries often choose to deploy these types of mortgages in order to implement shared ownership schemes. Home buyers in the UK are embracing shared ownership mortgages. With a shared ownership mortgage, first-time-buyers can get into a property and own a substantial portion of it thanks to a shared mortgage that provides the complete amount needed for the purchase. For first-time-buyers, this is very attractive because it reduces the amount of money they would need for deposit and for monthly payments.

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Credit Score Check

I can now check my credit score by doing a free credit score check online. My free Experian credit report gives me peace of mind that my credit rating is still good.

If anything in your report is out of date or gives a misleading picture of your willingness or ability to repay a loan, mortgage or credit card, it can affect your chances of getting the best deals. It can even lead to outright rejection by lenders. For example, you may have separated from a partner who has since run up debts but, because you have still got a joint account, his or her payment behaviour could be affecting you. You won’t see their credit data on your report but you will find a note of any financial association. Or you may have shopped around for the best offer, without realising your enquiries have been registered as multiple applications. These should show as quotation searches. If they are down as applications, lenders could think you are desperate for money, have over-extended yourself or even that a fraud is being planned.

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Pay Off Mortgage Early

Given the opportunity, it may seem the obvious decision to pay off your mortgage early. But is it? Unfortunately it’s not that simple, there are a number of things to check first.

 Are you allowed to repay your mortgage early?

Some mortgages penalise you for paying them off more quickly, especially if you have a special offer fixed or discount rate deal.This is because lenders want you to stick with them once the cheap rate ends, as at that point their rates shoot up. Thus it’s not in their interest to let you pay off the mortgage more quickly – after all the longer it takes you to repay, the more they earn.

Check whether there are any penalties or additional costs to making extra or higher repayments. If there are these are likely to outweigh the gains from repaying the mortgage in which case it’s time to start saving. Thankfully these penalties are becoming rarer, though most mortgages will allow you to make “overpayments” (i.e. paying more than the regular amount) in some form.

 

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