How to Find a Great Fixed Mortgage Deal
In the current economic climate, fixed mortgage deals are highly preferred by prospective home buyers in the US. These deals allow buyers to lock in their interest rates at the prevailing low levels. Even if the rates do rise in the future, the buyer still has to pay the same 30 or 15 year fixed mortgage rates that are fixed currently. The cost savings that this affords make fixed rate mortgages a good option for those who would like to keep costs within a well planned budget.
There are many mortgage lenders in the market and finding a fixed rate mortgage that suits all your needs perfectly and gives you the best rate in the market can be a challenging task. Here are some ideas you can use to make sure your you get the best deal on a fixed mortgage.
Keep Your LTV Low
The loan-to-value ratio plays a very important part in determining the overall cost of your fixed mortgage loan. The LTV makes a comparison between the total value of the house you want to buy and the total loan that you want to apply for. For example, you want to buy a house that has a price tag of £100,000 and you can pay cash deposit of £10,000. Your mortgage loan should cover the rest of the price, that is, 90% of the home’s total value.
Typically, lenders offer the best 30 year or 15 year fixed mortgage rates when you have a higher stake in the property in the form of a larger cash deposit. This reduces your LTV and consequently the total amount you need to take as personal loans. Keeping your LTV below 75% gets you the best rates in the market.
Select Your Mortgage Term with Care
In selecting the mortgage term you are most comfortable with, there are many different aspects to consider. The longer your mortgage term, the greater the period over which you are burdened with debt. On the other hand, a loan that is spread over a longer term entails lower monthly installments. This means that your recurring financial outgo is significantly reduced, allowing you to manage the payment easily, albeit for a longer duration.
A short term mortgage gets you out of debt quickly. The interest rates may be lower too. For example, 15 year fixed mortgage rates will be lower than 30 year mortgage rates. This lowers the total overall cost of your mortgage loan.
To make the right choice between the two options, you need to assess your monthly repayment capacity, your ability to sustain repayments over a long period and your overall financial position.
Hire a Mortgage Advisor
A mortgage advisor is a person who acts as an intermediary between you and the various lenders in the market. Hiring an experienced and skilled advisor can result in substantial savings in terms of money, time and effort. The advisor will have a good idea of prevailing rates, loan types and various new offerings in the market.
Armed with this knowledge he can quickly match your needs to the prefect mortgage loan. He can also negotiate for the best 30 or 15 year fixed mortgage rates with the lender of your choice because he is aware of the rates charged by competitors. The savings you derive from this service will easily set off the charges you pay for the advisory services.