Most people tend to take out a Mortgage or home loan,
then forget about it. The monthly payments go out from their accounts
every month, but they probably couldn't tell you what the interest rate
was if you asked.
Even a fraction of a
percent reduction in interest rates means big savings.
This is slack financial policy - it is easy to make sure you always
have the best mortgage or home loans interest rates, and therefore
pay the least interest. And believe me, over the years, even a fraction
of a percent reduction in interest rates means big savings! You
need to get in the habit of noticing current interest rates. This
is especially true if you are currently in the market for a new
mortgage.
Generally, Mortgage interest rates track the central banking
system's 'base interest rate', but there are a LARGE number of
deals for new customers, including early year discounts, fixed
interest rates, capped rates and so on. If your mortgage company
isn't offering you a competitive rate, but other mortgage lenders
are, confront them with it! Often they rely on your disinterest
to keep overcharing you interest (excuse the pun!). When confronted,
they usually crumble and will offer you a better deal rather than
lose your custom. |
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Shows you the true cost of the loan as a yearly rate.
Always use the APR when comparing home loans. The APR (Annual Percentage
Rate) allows you to compare the loans offered by different Mortgage and
home loan lenders in a like for like manner, and shows you the true cost
of the loan as a yearly rate. This stops lenders hiding 'extras' (such
as upfront fees) behind a fog of low rate claims, and means you have the
true interest rate to play with. generally, most house hunters get an
approval in principle from their chosen mortgage company.
If you meet the lender's criteria, try to lock in good interest rates.
This makes you more attractive to sellers because it shows you are serious,
and have the financial wherewithall to proceed should you decide to try
and buy their house.
It will also give you a firm indication that of what your budget is (although
most lenders have slackened their rules in recent years, they still apply
SOME rules!). This pre-qualification will keep you in the right price
bracket too, and stop you wasting time on properties beyond your reach.
If you meet the lender's criteria, try to lock in good interest rates.
This means the lender promises to hold their offer for you at a certain
interest rate for a certain time while you proceed with the purpose. Variable
rate mortgages, more popular in Europe, can be crippling if interest rates
rise from the historically low rates prevalent at time of writing.