14 Questions to Ask Your Mortgage Lender (See if They’re Really on Your Side!)

When you’re trying to buy a home, there are a million things on your mind. It’s tempting to throw yourself at the first financial expert you find and ask them for everything you need to know and an action plan. However, if you meet with a mortgage lender or broker and seem lost, the wrong one might take advantage of you.

Don’t forget that the process of finding a mortgage lender is a two-way street. They will certainly interview you and evaluate your credit, and you should be prepared to evaluate their policies and intentions as well. Here are some of the most important questions to ask when vetting a mortgage lender.

1. Which Types of Mortgage Do You Offer?

You might think a mortgage is a mortgage and there is just one type, but there are actually two main categories: conventional loans and government-backed loans. Not every lender is legally authorized to provide both types of loans, so if you are leaning toward one or the other, check that this mortgage lender can meet your needs. Conventional loans are probably what you’re most familiar with as they can be used by anyone. In turn, each lender has its own credit score and downpayment requirements which serve as an applicant filter.

Government-backed loans are more favorable to borrowers since they have lower down payment and credit score requirements. On top of that, the federal government insures them, which helps you avoid foreclosure. That being said, these are more exclusive loans only available to qualifying individuals such as those who have served in the U.S. military or who live in rural areas.

If you believe you may qualify for a government-backed loan, you should absolutely discuss this with a lender. A lender with your best interests at heart will help you determine if you qualify and support your application efforts.

2. What Credit Qualifications Do You Require?

To avoid a lengthy discovery process with a lender only to find you don’t meet their credit qualifications, ask about the requirements upfront. What is considered an acceptable credit score will vary from lender to lender, so don’t automatically assume you qualify. If you do have a great credit score, ask your lender if you’re eligible for any special offers or lower interest rates. No one likes to miss opportunities to make money, so don’t be afraid to stand up for your interests and ask.

If you have some time before you meet with a mortgage lender, see which tips you can follow to improve your credit score and get more favorable rates.

3. Which Type of Mortgage is Best for Me?

Sounds obvious, but it’s a must-ask. After all, this is one of the main points of seeking financial advice. Once you’ve provided detailed information about your history and needs, ask for a specific loan recommendation that includes the pros and cons of each option. This is also the time to speak up and ask the lender to explain all the fees. If you want more time to think and compare other lenders’ options, ask for a written summary.

4. What Are the Servicing Charges?

First, what is servicing? Servicing is when your mortgage payments are sent from your mortgage payment collector to investors, insurers, and tax authorities. One of the ideas behind servicing is to protect homeowners. First, servicers make sure that homeowners have the right insurance coverage. Second, if homeowners miss payments, servicers give them guidance to make payments, look for loan modifications, or find alternatives to foreclosure.

In general, these servicing payments are handled through escrow accounts, which you can imagine as the savings account your mortgage servicer manages that contains your mortgage payments. Servicing fees often fall between 0.25% to 0.5% of the monthly outstanding mortgage balance and cover the management costs of payments. However, a common difficulty here is that many mortgage lenders won’t know what servicing fees you’ll face because they sell the rights to your loan after it closes.

5. Do I Qualify for Any Down Payment Assistance Programs?

This is one of the most important questions you can ask a mortgage lender to see if they have the knowledge and motivation to get you the best bargain. There are many down payment assistance programs that vary by state and whether or not you are a first-time home buyer. If a lender can help you navigate through all the different programs and find one that suits your specific situation, they are worth their weight in gold.

6. Do You Offer Mortgage Points?

Now, what are mortgage points (AKA discount points)? In a nutshell, you can pay a portion of your interest upfront and thereby earn a lower interest rate. Buying one mortgage point costs 1% of the total loan value; however, depending on the loan, you can save a significant amount of money over the years by doing so. Along with this, ask if there is a maximum number of points you can buy.

These may not be right for everyone’s situation, but if you are interested, run the numbers and ask your lender to help you calculate the breakeven point. If the lender is interested in helping you save money at every junction while accommodating your financial circumstances, they’re a keeper!

7. What Will My Interest Rate Be?

This is another no-brainer question, but it determines how much you will pay each month. It can be difficult to predict exactly what your interest rate will be because it depends on your credit score, the size of your loan relative to home value, and whether you will live in your home or are buying it as an investment. Furthermore, general economic conditions, such as a recession or Federal Reserve policies, play a major role in determining interest rates.

To get an idea of what your rate should look like, see here.

8. What Will My Monthly Payment Be?

Your monthly mortgage payment is not determined by your interest rate alone. For example, you must take out private mortgage insurance if your down payment is under 20%. On top of that, real estate and property taxes may apply. Keep in mind that the mortgage payment not only covers a portion of the principal but also the interest you owe the lender.

If you want to keep monthly payments to a minimum, put down more money up front if possible. Another crucial part of this question is finding out if there are any prepayment penalties for paying off the mortgage early, either from moving or refinancing. Even if you think you know ahead of time what your payments will be, ask to make sure you aren’t surprised by any fees.

9. Do You Charge for an Interest Rate Lock?

In a fluctuating economy, you may want to lock down your interest rate so that it does not double in three years. Even from the time you begin your mortgage application to the time you sign, mortgage rates can change significantly. The tradeoff here is that you miss any opportunity to lower your interest rate should rates decline in the future.

There is some wiggle room here since some lenders give you the option of a one-time float down. Moreover, a new property appraisal, credit score, employment, or loan revision can be grounds to void a rate lock. Regardless of your preferred risk level, ask if there is a fee for locking the rate. If there is no extra charge, that’s the answer you want and a good reflection on the lender.

10. Do You Have an Origination Fee?

An origination fee is a charge to cover the costs of processing and “underwriting a loan” with “Mortgage Underwriting” a loan. It’s also an opportunity for the lender to earn some extra profits. Typically, it’s between 0.5% and 1.0% of the total loan amount. 1% may sound like a small number, but when we’re dealing with a six-figure property, this is not a cost to overlook.

Although it’ll be tough to get an origination fee below 0.5%, it is possible to negotiate a lower fee by talking with several lenders and bringing each competitor’s offer to the table. Moreover, the larger the loan you seek, the more bargaining power you have. Regardless of whether you are concerned with origination fees, you should compare lenders across a variety of factors and bring that information to the negotiating table.

11. What Other Costs Will I Pay at Closing?

Generally, origination fees are included in the closing costs, but there is also a multitude of other fees that can appear at this time. These should be detailed in the Loan Estimate document, but it’s important to have these in mind from the beginning when you are still loan shopping. You don’t want to place all your hopes in a lender only to be surprised with hidden fees at the end.

Be on the lookout for the following and more:

  • application fee
  • appraisal fee
  • credit check
  • mortgage insurance
  • VA funding fee (if you use a VA loan)
  • prepaid mortgage interest points
  • title insurance
  • escrow fees
  • settlement fee
  • homeowner’s insurance
  • recording fees and transfer taxes

There is a large range when it comes to closing costs, but you can expect them to be between 3% and 6% of your total loan value.

12. How Will You Update Me on the Loan’s Progress?

Especially if you are dealing with multiple lenders simultaneously, you will want to make sure they have a regular and defined communication plan regarding your application process to help you stay organized. While you can take it upon yourself to independently follow up with each lender, you want them to be on top of things and proactive.

Here are some key questions to ask:

  • How often will you update me?
  • Will I have a single point of contact throughout the entire process?
  • How will these communications be shared? Phone, email, online, etc.

Part of the reason you should ask this question is to see how accommodating the lender is to your expectations and needs. If they want to follow a communications plan that works for you instead of a rigid, cookie-cutter plan, this is a good sign that they are accommodating and care about your experience. Moreover, when you are comparing lenders, you want to be sure that you can reach someone and determine your status when necessary.

13. How Much Time Is Left Till My Loan Closes?

You have a busy schedule and a million things to coordinate before moving, so you want to know when you can get your mortgage and nail down a move-in date. Moreover, if you are still comparing lenders, consider the pace of business operations between lenders. Does one lender take ages to process applications and make decisions? This could be a headache in the future.

Another component of this question is asking your lender what actions you should avoid during this time. For example, making major purchases on credit or doing things that change your credit score could damage your chances of getting the loan you want.

14. Will You Sell My Loan?

Don’t be too alarmed if this answer is yes because selling loans is standard practice. In your parents’ and grandparents’ time, lenders would keep your mortgage in order to regain the loan amount plus interest. Nowadays, the purchase of, or investment in, mortgages is a major industry and involves institutions such as Fannie Mae, Freddie Mac, FHA, and more.

If the answer is yes, ask how that will change your relationship with the lending and servicing institution and who will be your point of contact. Normally, when you have trouble making payments, you will discuss options with the servicer, so make sure there is someone available to you.

First Time Home Buyer Mortgage in Toronto

Have you ever dreamt of owning a house in Toronto?Do you wish to settle down with your family in a home that caters to everyone’s needs? There is one way to make that dream a reality; through a mortgage. As a first-time homebuyer, it can be stressful and daunting to apply for a mortgage. And with the real estate market in Toronto heating up, securing a loan to fund your dreams makes it even more challenging. Having said that, there is a range of homebuyer programs across the country that can make it easy and straightforward to buy your first home. It is ideal for first-time homebuyers to familiarize themselves with any of the first-time homebuyer programs so that they are aware of what program best fits their real estate and financial needs. These programs are also efficient ways to fund your down payment, rebates and tax benefits.

Key benefits of first-time homebuyer mortgages:

  • It makes purchasing a house reasonable for all
  • It is a cost-efficient way of getting credit
  • Growth in capital
  • A smart way of saving money
  • It ensures your property is safe
  • Provides several tax benefits
  • Significantly increases the loan eligibility

Comprehensive first-time homebuyer solutions

It is an indescribable feeling switching from your rented home to owning the house of your dreams. If you are considering buying a house for the first time and need professional help in getting a home mortgage that meets your personal and financial needs, you can rely on the team at ABC Mortgages to design a personalized mortgage plan that will take away the stress of being a first-time homebuyer. If you have approached a traditional lender and your mortgage application has been rejected, don’t worry! We also provide mortgage solutions to self-employed individuals and for those whose credit score is poor as well. For more information on our first-time homebuyer mortgage in Toronto, contact our professional and friendly team today.

Make your first-time home mortgage tax-deductible with smart borrowing strategies

When searching for the best mortgages rates, there are three crucial factors to keep in mind:

  • The mortgage rate
  • The terms of the mortgage
  • What are your tax implications

Contrary to popular belief, the least important factor that you will take into consideration will be your mortgage rate. It is important to keep the terms of your mortgage as a priority, as it will offer greater chances for savings further down the line, including letting you make your mortgage tax-deductible. ABC Mortgages has a wealth of experience in the industry and clearly understands the mortgage process to offer clients the best rates, tax savings, and terms. Regardless of your financial situation, you can rely on our team to find the best ways to help you save on your first mortgage.

Schedule a free initial consultation with ABC Mortgages today!

Are you planning to invest in a house but unsure where to start? No need to stress, at ABC Mortgages, we will guide you every step of the way. From purchasing the home to personalizing home buyer mortgage plans, we do it all, effectively and efficiently. Please do not hesitate to get in touch with our team today to discuss your requirements, and you can rest assured; we will identify the right mortgage plan that compliments your budget. We pride ourselves on providing a service that is honest and reliable at all times.

Reasons to Refinance Your Mortgage in Toronto

Getting a lower interest rate is not the only reason to refinance your mortgage. It can also be used for several financial reasons. Below-mentioned is some of the reasons for mortgage refinancing in Toronto:

#1 Ensuring you get a lower interest rate

Refinancing your mortgage can help you save a lot of money over time as you can get a lower interest rate. However, it depends on the size of the outstanding mortgage, including the prepayment penalty. If your current mortgage has a variable interest rate, then every three months you can expect to pay a penalty on interest. If your mortgage has a fixed rate, then you will be expected to pay the greater of the three months interest. Don’t let penalties be a stumbling block on deciding whether to refinance your mortgage.

#2 Allows you to access the equity in your property

Through mortgage refinancing, you could potentially access up to 80% of your property’s value to pay off any outstanding debts. Additionally, the money can also be used for investment opportunities, home renovations, including taking on a Home Equity Line of Credit (HELOC).

#3 Debt consolidation

If there is enough equity present in your house, you might be able to utilize the built-up equity in your house to pay-out high-interest debts such as credit card bills, car loans, a line of credit and much more. Additionally, you can also consolidate debt with the help of several mortgage refinancing options available.

#4 Helping you to finance the purchase of property

If you have a significant portion of the equity in your property and are interested in investing in real estate, you could withdraw equity from your current property through mortgage refinance and use the amount as the down payment to purchase the property. Additionally,interest may be deducted, which is usually missed when using your current savings.

#5 Funding your education

As parents, the best thing we can do for our children is give them a sound education, including being good role models to them to look up to. By giving them the best education possible, they can become more responsible citizens, as well as build a solid and stable foundation for themselves. With the country’s rising education costs, most individuals do not set up adequate funds aside and eventually suffer from the financial burden of paying a lot more than what they bargained for their children’s education costs. The cheapest and the best way to bridge the gap is through a mortgage refinance.

#6 Funding your house renovations

If you are spending more than $20,000 on renovations for your property, it can be less stressful for you to take out a mortgage refinance than a loan or a line of credit. Also, in today’s real estate market, your current mortgage may no longer be the best-suited option.

#7 It helps pay off your unexpected medical bills

Just like the economy, life is uncertain, and unexpected medical expenses may arise to take care of certain treatments. If your insurance policy has restrictions that can put you at risk financially, a mortgage refinance may offer you a quick and straightforward solution.

For further enquiries on mortgage refinancing reach to a trusted mortgage broker in Toronto.

Reasons To Get a Second Mortgage

Many homeowners who are looking to borrow money find themselves turning to second mortgages. Perhaps you have even considered this yourself or perhaps someone has recommended this to you. But what exactly is a second mortgage and what makes it such a powerful tool for borrowing?

Simply put, a second mortgage is a loan against your home equity. Unlike refinancing, getting a second mortgage does not require you to break your first mortgage which means there is no financial penalty. Most lenders will allow you to borrow up to 80% of your home equity when you get a second mortgage – so the amount that you can borrow is often substantial.

Let’s say that you have a home that is worth $500,000 and you still have $100,000 owing on your mortgage. That means you have $400,000 in home equity. Now if a lender allows you to borrow up to 80% with a second mortgage, that means you could borrow as much as $320,000.

In terms of repayment, a second mortgage works just like a first mortgage. You make regular monthly (or bi-weekly) payments with the required interest for the term of the second mortgage. At the end of that term, you can either pay off the balance or renew for another term.

Second mortgages vs. other types of loans

One of the biggest advantages of borrowing from your home equity is that interest rates are considerably lower than they are on other types of loans such as credit cards, personal lines of credit, or other unsecured loans.

Because your loan is guaranteed by your home, lenders consider this to be less risky, and are therefore prepared to offer better rates.

These loans can also be much easier to qualify for which is important if you don’t have stellar credit.

When compared to refinancing (which is another popular way to borrow from your home equity), a second mortgage will likely have a slightly higher interest rate. But since there is no financial penalty for breaking your mortgage, a second mortgage could still be the most cost-effective way to go.

In making the decision as to whether to get a second mortgage or a mortgage refinance, the most important factor in determining which is the better option, is your mortgage renewal date. The closer you are to your renewal date, the more refinancing makes sense. But if your renewal date is still quite some time away, getting a second mortgage is likely your best option. But don’t get too tied down in these details – your mortgage broker will run the appropriate calculations for you to determine which is the best option for you.

Reasons to get a second mortgage

A second mortgage can be a good borrowing strategy for anyone who is looking to borrow a large sum of money. Because interest rates are low on these types of loans, it can be easier to pay off a second mortgage than a large unsecured loan.

Large expenses such as home renovations, investing in a new business, or getting a down payment for another property are all popular reason for people who choose to get a second mortgage.

Another good reason to get a second mortgage is for debt consolidation. If you have a lot of high-interest consumer debt, paying it all off can feel impossible. And if you are paying multiple lenders, trying to remember all the different payments can be really stressful.

Getting a second mortgage in order to consolidate your debt can move all those payments into one easy to remember payment. And because you can save quite a bit on interest, you will be able to pay down the principal faster or be able to keep more money in your pocket each month – or possibly even both! By using a second mortgage to consolidate your debt, you may be able to get out of debt months – or even years – sooner.

What if I have bad credit?

As long as you have enough equity in your home, it is likely that you still will be able to get a second mortgage even if your credit isn’t perfect. Mortgage brokers work with a variety of different lenders and some of these lenders specialize in helping people with bad credit.

Even better as you pay off your second mortgage, it can actually help you to rebuild your credit score. This is particularly true if the reason you got the second mortgage was to consolidate your debt.

Are there any disadvantages to getting a second mortgage?

If you need to borrow a large sum of money, then getting a second mortgage can be a really good strategy. But since you are leveraging your home, it is very important to know that you will be able to handle the debt payments. Otherwise, you could end up in financially worse shape than you were before.

Contact us today

If you are considering getting a second mortgage, or if you would like to discuss this option with a broker to see if it is right for you, then give us a call  today to set up an appointment.

5 Things about Subprime Mortgage Lending You Need to Know

Subprime lending, the culprit that caused the 2008 financial crisis, is back in the business.You may be an institutional investor,a wage slave who lives from paycheck to paycheck, or an aspiring financial planner, it’s important you understand what subprime mortgage means for the economy.

Subprime mortgage has changed

Events that led to the financial turmoil made people with extremely poor credit eligible for mortgage loans. We all know how that worked out. But it’s 2018 now and subprime mortgage seems to have undergone some changes.

The zero money down scheme is a thing of the past now. So is getting a mortgage loan without having to prove your income. Today, a person with average credit can get a subprime loan. Interest rate will hover around 3 to 5%.

You might find it surprising. When, in spite of Ben Shalom taking over after Alan Greenspan, hiking the interest rate to almost 6%, the secondary market offered a low rate, today when Fed kept the interest rate down to 2%, doesn’t it make more sense for the subprime interest rate to be trading at a low? No. It doesn’t.

Apparently, the players in the industry are yearning for a makeover. They want borrowers, who, in Buffet’s lingo, “have skin in the game.” In other words, who are unlikely to have a foreclosure. A bid to wipe their slate clean – you might call it. But a bid we should endorse.

Now of course, there are people who believe it’s 2007 all over again. But they should learn to separate moderately tightened rules from no rules.

No skipping of documentation

Documentation should be necessary for all kinds of lending, not just subprime lending. But the latter requires it more than other lending types.`Subprime lenders have a bad reputation which they need to fix and strict documentation rules can help them in doing so.

Today, FHA and other legit subprime lenders require you to document your annual income, debt and employment type. The point of having such toughened grip around documentation is to make it function more like a filtering mechanism that will weed out the borrowers who will invariably default in the future, if granted the loan now.

Rigid documentation rules benefit customers too. Ask yourself, do you want to sign up for a bad mortgage loan, which you’ll never be able to repay? Not only you’ll end up a defaulter, losing your home, but your dream of building a decent credit will be shattered forever.

Strict documentation comes with equal risk reward ratio. On the reward side, you may be setting yourself up for a financial windfall. Who knows? Anything positive on your credit report can make it easy for you to secure loans in the future. Get good insurance deals. Etc.

Low credit score

Those with average scores often get turned down by banks and large financial institutions alike. The collective US debt index has been up for, God knows how long. Most lenders play safe by approving loans to only those with credit score surpassing 600.

Some genuinely nice borrowers, who for some reason had a score below 600 met with rejection from lenders that take FICO score too seriously. Such borrowers are far too many to ignore; I personally know plenty such borrowers with credit scores ranging between 520 and 580.

Subprime lending is a space they can enter. FICO score is undoubtedly important but can be influenced by a garden variety of factors – such as, someone quitting a stable job in favor of an independent profession; self-employment may be a lofty proposition for millennials, but not to credit bureaus.

Hence, FICO score shouldn’t be a sole benchmark to decide whether someone will repay the loan. Subprime lenders understand this and take their outreach to the rejected lot.

Dodd-Frank getting repealed?

Only White House insiders know this for a fact. Since we are not one of them, we can only speculate. I am basing my speculation on Trump’s promise to replace financial stagnation.

In June 2017, the Financial Choice Act was passed in the House. The act basically allowed the senate to kill Dodd-Frank. Dodd-Frank’s future is uncertain. But the speculation that it will be repealed is what’s driving an uptick in owner financing.
Dodd-Frank rules make it a bit tough for a buyer to obtain loan from a seller. But if Dodd-Frank is repealed, such difficulties will quickly vanish.

Final verdict

We now come to a point where we have to answer a pretty straightforward question – will subprime mortgage loan be good for the economy or not?

In my opinion, it’ll be beneficial in the long run. People with not-so-impressive credit scores will be able to finance mortgages. On the other hand, banks will slacken their current underwriting norms. For ordinary people, it could very well be a win-win situation.

Useful Tips for Find the Best Mortgage Brokers

Are you planning to purchase a new property? Buying a house is itself a time consuming activity.  It is a huge investment and rarely do people settle for the first house they see. Once you settle for your dream home, you might require a mortgage that will help you in covering your budget needs. But, what will a wise decision be? Choosing mortgage brokers or getting it yourself? Without a doubt, hiring a professional is always advisable over the idea of getting things done by yourself. You would have spent quite a lot of time, finding it, now don’t delay further in making that home yours. This is because the experience, knowledge, skill and abilities that they hold can turn out to be a huge bonus for discovering suitable mortgage plans.

The only problem is that there are several brokers out there and each one of them guarantees to offer the perfect solution. In such a situation, it becomes a troublesome task to select the right one amongst the many. In order to find the ideal one there are four quick and easy tips that you can follow, and this article explains it all.

Capitalize on rich Recommendations from Reliable Sources

This first and the most important step for sourcing the best mortgage brokers is to take resort to the recommendations provided by family members, friends or any other potential resources. Do remember that the recommendations are going to give a direction to your search for the ultimate brokers, therefore think, understand why people recommend certain professionals and then shortlist them.

Research and dig deep to know all services offered by Shortlisted Brokers

When you have your set of recommendations with you, the next step is to research about the respective brokers and analyze how well they have been in their business. Here you can consider

  • The number of years they have remained active
  • The number of clients that they have served so far
  • The types of services offered by them and
  • What do their previous customers have to say about them

Emphasize each and every factor that is important for you when you are researching about the different mortgage brokers. For receiving optimal results, first you can enlist your requirements and then consider whether the broker is able to fulfill them or not. Take ample amount of time when doing so, as this can help you in refining your search.

Compare Different Mortgage Brokers

Once you have gathered brief, good knowledge about the services of multiple brokers – let’s say three or four – then compare them with each other in terms of their services, price, experience and expertise. To increase the confidence and get more information on this, you can even request for a free quote from the broker and then utilize it to check if it proves to be economical in comparison with others in the business. They would charge assorted fees depending on the process and requirements such as origination fees, lender fees or others that are part of their services. The price varies of every broker and is subject to the quality and length of services offered in the package. You should always seek an opportunity to interview shortlisted mortgage brokers if you have any sort of queries by arranging an appointment. Ideally, some of the questions you may ask could be:

  • What are their pricing policies?
  • Do they provide proper customer service?
  • How will they help in discovering the ideal mortgage plans?
  • What is the turn-around time they can assure things to move??

Most of the brokers do not charge any fees for interview or consultation. However, it is advised to discuss about the same with the broker beforehand.

Ask about the Documents required to propel the process further

Say if you have followed all the steps as mentioned and finally found the best mortgage broker, and you are quite satisfied with the quality of services and the price charged. Then comes the last and most important step, which is to ask them about the various documents that will be involved. It is of great significance to ask all the questions regarding what kind of documents will be needed to legalize your mortgage actions. The discussion with your broker regarding documents will enable you to prepare everything in advance and faster. It will be difficult for you to produce all the legal documents after doing entire formalities. So clarify your doubts about this, and try to quench your curiosity related to the mortgage procedure by asking relevant questions.

The search for ideal mortgage brokers does not have to be difficult at all. Just take an account of the four tips mentioned above and then you will be able to unleash the appropriate broker in no time. And do remember to follow them in a systematic manner.

Remortgage Risks and How to Avoid Them

A large number of home-owners in the UK, do not realize the implications of taking out a mortgage. Before you buy a property, you must understand that you are making a commitment for between 25 – 30 years. Depending on the type of mortgage product you choose, you will be required to change lenders after a set time. If interest rates go up by just a couple of percent during this period it can mean when you come to remortgage; you are in financial difficulty. This is due to the rise of money you have to pay back each month.

Remortgage Risks

There are also some risks attached to the price of the asset. Most buyers make the mistake that they think prices will continue to rise. History shows us that is not the case and around every ten years, we see a correction in the market. The last price crash happened in 2007/08 and led to the worldwide recession. It is nine years since it last happened, so it is likely that the prices of houses will fall over the next couple of years.

Price of Houses

If houses prices go down, the loan amount will owe remains the same. You will have to pay a monthly cost each month for an asset which is not worth the value of the mortgage. This is not too bad if you do not plan to move any-time soon as prices should recover over time. If you do want to move though you could be forced to pay thousands of pounds to cover the loss of the property. Most people are unable to do that so it can lead to a very difficult situation. It can be horrible if you own a home with a partner who you are splitting up from. Many couples are forced to continue to live with each other even after they split because they just can not afford to move.

Planning Ahead

One of the best pieces of advice is to plan ahead so that you do not get in a tricky situation. Before taking out a mortgage make sure you carefully read the terms and conditions along with speaking to a remortgage solicitor. They will be able to explain the risks so that you can plan ahead. With zero planning you could end up getting yourself into financial difficulty. Try and set budgets and always if you are able to, put money away each month. You will then be able to pay for any unexpected costs and not have to go into debt to pay for them.

When You Should Not Remortgage

Do not remortgage your home to take out cash if you do not need to. The equity in the property should act as a safeguard to cover you in the event of a property downturn. If you keep on taking out cash when remortgaging, you are never going to be able to pay back the loan. Also, if interest rates go up, you will be paying a lot more money back over the term of the mortgage.

There are thousands of different mortgage products out there so make sure you speak with a broker about which is best for you. You can also talk to a remortgage solicitor who will be able to explain all the legal terms to you so you can fully understand what you are entering into.

How To Remortgage Your House

Before you remortgage your house, speak with an IFA or mortgage broker. They are experts in this field and will be able to recommend you the best way forward for your personal situation. Brokers also have the ability to search the whole of the mortgage market. They will be able to find the cheapest deals and save you money on the remortgaging costs. They should also be able to recommend a great conveyancing lawyer to assist with the legal work. Before you hire though, make sure to compare the costs as it is the only way to know if you are getting a good deal or not.

Remortgage Solicitors Conveyancing Costs

Once you have found the perfect mortgage product, you will need to find a house conveyancing company to handle the legal side. Make sure you use a comparison site to find the best remortgage solicitors costs. You will need to select a conveyancer approved by the lender that you have chosen. If they are not approved or not willing to approve them, you will need to change conveyance lawyers. The lender will be able to give you a list of conveyancers you can use for the transaction.

Daniel Kay has worked in the financial sector for the last 12 years. He has built up and exceptional knowledge base and helps people save money. Daniel has built a website to help people compare House Conveyancing and remortgage quotes fro the best UK conveyancers.