| Frequently
Asked Questions
CAN
I USE A MORTGAGE BROKER?
The difficulty
for most people in shopping for their own loans is that
they don't know all the right questions to ask and most
lenders offer only two or three programs.
A mortgage broker,
on the other hand, can submit your loan to many different
lenders, have access to many different types of loan programs,
can shop around for the best and most competitive mortgage
rates and terms available tailored to meet your particular
needs. Some charge fees (processing or origination fees);
some do not. If you are happy yourself doing the ferreting
for the best rate, points and fees and canvassing lenders
(made profoundly easier by savvy wired Americans), "have
at it". If you do not have the time to do a thorough
job, a mortgage broker, either one nearby or on line can
provide a useful service.
HOW MUCH CAN
I BORROW?
This depends
on how much you earn and how much the property you want
to buy is worth.
Depending on
the property's value: Most lenders will loan up to 75% of
the property's value and many will go to 90 or 95%. Some
will even let you have up to 100% - but you'll pay over
the odds for this and will probably be forced to buy mortgage
indemnity insurance. A few will even lend more than that
but special rules will apply.
Depending on
how much you earn: The amount you can borrow will vary between
lenders but the rule of thumb is three times your annual
earnings.
Here's a secret:
Assuming you have a regular income and clean credit history
you are likely to be offered a loan fairly easily.
Despite the impression
you may be given that you've got to jump through the hoops,
the competition between lenders is fierce and they want
your business. To secure the loan though you'll still be
best off playing the game by acting duly grateful though.
Perhaps the more
important question is more how much can you afford. Some
lenders will want to estimate this by checking your average
outgoings e.g. your household bills, any debts etc. Some
will get you to fill in a detailed questionnaire either
by hand or on the phone or online etc.
If you're a first
time buyer it will always help if you can show you've been
paying regular rent for a similar amount to what your intended
mortgage payments will be.
Depending on
the area you want to buy in, sometimes lenders' may refuse
a loan if they feel the property isn't expensive enough
for the area. This is more likely to be the opposite - where
a property is seen as too expensive.
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