Let’s beat the banks
Overcoming the schmaltz of loyalty
The taboo of being loyal to your bank comes without any reason. It is highly recommendable to be in the lookout for a better deal. Your bank holds a number of products in option but not all products are right for you. Do not rely on a single bank, rather dive into the mortgage market and scrutinize all the options available at different banks to choose the mortgage plan that is right for you.
Taking advise from a mortgage broker
There is are a number of mortgages available-Fixed rate and Adjustable Rate, Federal Housing Administration (FHA) mortgage, Veterans Affairs (VA) mortgage, USDA loans and RHS Loans, Jumbo loan or a Conforming Loan and multiple others. A mortgage broker helps you curtail the available options by eliminating the options which are unsuitable for you. They list out budget-friendly plans and guide you to make a final choice. A mortgage broker is a professional who knows each deal, hence, guiding you to avoid the unseen pitfalls.
Bargain a better discount
Most banks play their cards right keeping the strongest ones in hand, so there is room to bargain. They can offer the mortgage borrower a discount of up to 0.7% which they refer to “professional package”. Do not hesitate to negotiate. Get the best out of what your bank offers.
Eyes on the fees
Make sure that you understand the fees pattern of the products on display. Do not forget to compare your products with other similar options. Though banks advertise to offer a lower rate of interest, it is nothing but to compete with their rival banks. In reality, they deny to face you with the hidden costs that lurk under these low rates of interest. Look beyond the advertised rate and address the related fees for the chosen loan. The Annualized Average Percentage Rate (AAPR), also known as the true rate, helps you to compare the total cost of the product and not only the advertised rate of interest.
Fortnightly or weekly mortgage payment
Generally, home mortgage repayments are due on a monthly basis. But calculative, these monthly repayments generate much more interest as revenue for the banks. With the simple arithmetic of compound interest, you will see that repaying fortnightly or weekly loans can reduce your interest.
Opt for an interest-only loan
When you opt for an interest-only loan, it comes attached to an offset account. It is a great way for investors to maximize their contributions to the offset account by minimizing their payment of interest on the loan.
Paying off ‘bad debt’ by refinancing
If you hold other ‘bad debt’ like credit card loans, personal loans with equity in your property, it is recommended that you try refinancing. But this refinances should be at a rate of interest that is much cheaper. Ensure your card debts are managed rightly after you paid it off with your bank’s money.
Review your prevailing circumstances regularly
As soon as you decide to buy a property, start looking up the mortgage reviews instantly. A time period of three months is a huge lapse for a product to go outdated. Keep yourself updated at every moment to get the best of deals and beat the bank.