Compare Mortgages

Recent statistics from the Department for Constitutional Affairs state that court actions by mortgage lenders rose to 28,476 in the second quarter of this year for those that dont follow such trends thats up over 50% on one year ago. Also, at 18,330, the number of repossession orders was the highest for 9 years.

Although yet to reach the previous peak of around 40,000 repossessions in the second half of 1991, this is a very worrying trend for homeowners and landlords alike, who have got used to permanently rising prices and historically low interest rates and borrowed against ever increasing equity either to fund a higher quality lifestyle or to pay the deposits on further investment properties.

The massive house price inflation over the recent years gives lie to Gordon Browns boasts about his low inflation economy. However the mock shock horror at the antics of yet another lying politician is of no importance. What is VERY important is the fact that it is consumer borrowing against this property price inflation that has kept the economy afloat. With house price inflation slowing, stopping, or going into reverse (depending on whose statistics you believe), people have nothing left to borrow against and are reaching their limits. Combined with the UKs near total de-industrialisation and reliance on the service sector (which has little or no export value), this is going to have a serious negative effect on the economy in the near future.

So what does that mean for you the landlord? A sudden large-scale collapse in prices – as seen in the early nineties – seems unlikely to this author because there are still more people in need of housing than there are suitable and available properties; simple supply and demand economics – people will still need property to rent.

However if the economy takes a severe downturn, aside from other problems too complex to cover here, then a lot more peoples rent will have to be met by the government. As well as the obvious strain on the taxpayer, this is quite obviously bad news for those private landlords who refuse to take tenants who are claiming housing benefit. If you think about it, Housing Benefit is better than free property advertising in that there are a constant stream of takers and the cheques definitely do not bounce!

Those negative landlords are, as in every business, the ones that will find themselves being left behind the proactive landlords who have already opened their minds and embraced the income stream generated by tenants on Housing Benefit. Although there may be problems at the moment, the council is working very hard to overcome them and make the service all that it should be.

Finding mortgage loan offers in the UK is not difficult. From newspaper advertisements to surfing the Internet, mortgage loans sporting low interest rates and additional benefits to entice borrowers to sign up are literally everywhere. But, when a mortgage offer claims that it can save ‘x’ amount over the competition, how can you be sure just how much it will save you when applied to your own mortgage loan? Moreover, if the deal offered is short-term, how much will the offer’s standard mortgage rates compare with the mortgage rates you are currently paying for your loan? The answer to these conundrums is to compare the mortgage offers against each other, and to do this we need a loan calculator mortgage calculator.

Making comparisons with a loan calculator mortgage calculator

A loan calculator mortgage calculator is a clever little web program that is freely available on many loan and mortgage related websites. The principal behind a loan calculator mortgage calculator is quite simple – input the amount of the mortgage loan into the calculator along with the interest rate applied to the loan and the loan duration, hit the ’submit’ button and ‘hey presto’ you have a schedule of monthly loan repayments. So, for two or more mortgage offers you can enter the loan parameters into the calculator along with your mortgage balance and get an idea of what a particular mortgage offer will cost you each month, as well as what it will cost you in total over the lifetime of the loan.

To accurately compare your loan calculator results for different mortgage offers it is a good idea to print off each set of loan calculations from the calculator and make a side-by-side analysis of them. If the calculator you are using cannot handle multiple interest rates across the life of the loan then you may need to do several calculations to arrive at the final loan cost before making your side-by-side comparison. As an example, if you were to spend say 4 years on a fixed interest rate of 4.5%, and then change to a standard rate of 6.75% you will need to make two calculations – one at 4.5% to work out repayments across the first 4 years, and then a second calculation at 6.75% for the remainder of the mortgage term.

Aside from mortgage loan comparisons a loan calculator mortgage calculator can be used to work out how much of a mortgage loan you can afford in the first place. To do this simply choose a calculator that allows you to ‘reverse’ the calculation process by entering the repayment amount that you want to pay  can afford to pay each month and the interest rate. The calculator will take the loan input information and from it extrapolate the total mortgage loan you can apply for. Do bear in mind though that mortgage companies are rarely willing to lend more than 3.5 times your salary on a 75% mortgage or any loan greater than 75%.

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A mortgage broker is a well-trained professional representing those who seek home mortgages and provide them with options working towards an ideal solution. He is well versed  on the entire mortgage process and is committed to give his clients the best mortgage solution. A mortgage broker is considered as financial matchmaker between the borrower and the lender and is very knowledgeable and professional, as they have contacts with many lenders. They can find the best interest rate for the borrowers to suit their needs by taking quotes from various lenders and shortlist them for their clients.

Federal laws, state laws and licensing boards, regulate these mortgage brokers. They charge a nominal fee for the services he renders to the customers. Even though the borrower spends money on a mortgage broker, he still saves a lot of money due to the advice got from the mortgage broker. Mortgage brokers have extensive connections  with mortgage services and products companies selling at wholesale prices and they in turn market these services and products to their customers.

Need for using a commercial mortgage broker:

By engaging a mortgage broker, the customer gets his value for money spent on him. They provide the customers with excellent financing options according to their needs and objectives.

Locating a mortgage lender is not an easy task. By engaging a mortgage broker, this process is simplified as he has contacts with many lenders offering various financial options to the home loan seekers. With the help of a mortgage broker, the customer has a very good chance of getting loan options with outstandingly low  interest rates.

When working along with a mortgage broker, the borrower’s loan application has the possibility of being submitted to various lenders, this in turn increases the chances of the loan getting funded and also gives the mortgage broker the power to bargain in getting the best deal.

Since each and every kind of property has its own advantages and disadvantages, hiring a mortgage broker who is specialized in that particular loan type, will definitely be an advantage to the borrower. Also it saves a lot of time to the borrower in locating the right kind of the lender offering the best deal.

Advantages of hiring a mortgage broker:

The mortgage brokers have extensive knowledge about the mortgage market and can find the borrower the best financial solution from the available options. They have access to a huge database of lenders and sometimes might even help the borrower to get mortgage from the principal bank itself. Since, mortgage involves lot of paperwork; it is taken care by the mortgage brokers, hence,helping the borrower in  reducing the time spent on searching for options. They also can negotiate and present your case well to the lender and get the best possible interest rate to the borrower.

Disadvantages of hiring mortgage brokers:

Some kind of unscrupulous brokers might be there who show bias towards the lenders and make the borrower pay higher fees and commissions instead of providing an appropriate product or service to him. Some brokers may be void of training and knowledge about the mortgage industry but may make the customers believe that they are good knowledgeable people. Not all the brokers may have good contacts with the lenders. and might also charge exhorbitantly.