Improving your mortgage
Saturday, November 4th, 2006
Contrary to what most people think, mortgage terms aren’t cast in stone; it’s possible to get a better mortgage, with a little planning and judicious activity.
You need to know which factor is the key.
- Always shop around and get at least 2 or 3 estimates. Some banks, wanting to limit exposure to a particular area, may have higher terms than others.
- If you’re consistently getting worse terms than normal (rate of interest, lower periods), look at whether your credit report has some blemishes; late payment, or high debt to available credit. Some of these can be cleared up within 3 - 6 months, making you eligible for a better rate.
- Is the total amount sanctioned too low, even though the rate is good? Check whether extending the loan period makes a difference - the instalments for a 15 year loan are higher than that for a 30 year loan.
- Or is some other commitment limiting your eligibility? A car loan, other committed payments?
- Can you improve the terms by having a co-signer? Parents or siblings can help here
If none of these work, look for a good advisor - your circumstances are probably different, and need a competent person to evaluate and give you the appropriate solutions.
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