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I'm Laura and I post snippets of my life in budgets, travel, and minimalist living.
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The following is a guest post.
Getting a mortgage can be a daunting and confusing prospect for anyone, especially if you are doing it for the first time. If you are going to be paying it off for the next 25 years, you want to make sure that you are getting the best deal available. Do you go for a tracker or fixed rate, interest only or repayment? The options seem endless. You shouldn’t be too daunted however, as there is plenty of information and advice available to make sure that you get the deal that is right for you.
1. Different types of mortgage
There are two main types of mortgage that you can choose from, interest only or repayment. The difference is simple – with an interest only mortgage you pay off the interest on the loan each month and still owe the bank the cost of the house at the end of the term, whereas with a repayment mortgage you pay off both the interest and the mortgage each month and the house is yours at the end of the term. It is important to decide which is right for you.
2. Mortgage rates are affected by the economy
In simple terms, when the economy is doing well and everyone wants to buy a home then mortgage rates are low, and when the economy is doing badly and less people can afford a home then mortgage rates decrease. If rates are low, like they are at the moment, it will probably be preferable to get a fixed rate for as long as possible. You may be considering a relocation, and its most important that you do your research, for example searching for best mortgage rates in Canada with Ratesupermarket would allow you to gain insight into a completely different economy. Similarly, you can search anywhere you so desire.
3. Save money by researching
Mortgage rates can vary drastically by lender and by the type of mortgage that you choose. If you don’t feel in the best position to make this decision then go to a mortgage advisor who can help you to get the right rates for you. Many will not charge you anything and take their fees from the lender. They can often give excellent advice and get access to the best deals, but again go to a few until you feel comfortable and ask for recommendations from family and friends.
4. You can negotiate
You can negotiate with your lender to get the right deal for you. Sometimes by paying more money upfront you can reduce monthly costs and there are different options when refinancing. Talk to your lender to get the best deals as they are always keen for your business.
5. You can remortgage
Remember that you don’t have to stick with the same mortgage forever. It may be worthwhile fixing your rates while interest is low, but, at the end of the term they could shoot up. Try to renegotiate the rates with your lender but if they aren’t preferable then you can move lenders to someone who will give you the mortgage you need. Remember that you hold the power!