What is a Mortgage?
A mortgage is a loan taken out to buy property or land. They are commonly for 25 years but often the year term can be shorter or longer. The loan is ‘secured’ against the value of your home until it’s paid off. If, for some unfortunate reason, you can’t keep up your repayments, then in this particular situation the lender can repossess (take back) your home and sell it so they get their money back.
Affordability Analysis
Before putting down a mortgage, it is best to perform a quick analysis of finances. Calculating costs of owning a home is best, which includes calculating the following: household bills, council and other taxes, maintenance and insurance, so on and so forth. The lending party can often demand seeing proof of your annual or monthly income along with debts. The lender, which can be a bank or an organization, will want to make sure that you are well able to keep up with repayments if, in such case interest rates rise. The lending party also reserves the right to deny offering a mortgage at all if they think that the repayments won’t be repaid.
Where to Get a Mortgage
A mortgage broker can perform a comparison of different mortgages presently on the market including those mortgages which are not offered directly to customers. Often times, a broker looks at mortgages from the ‘whole market’ instead of looking at products from a number of lenders.
Applying for a Mortgage
Applying for a mortgage is often broken down into a two-stage process.
The first stage often consists of calculating how much you will be able to afford, and which type of mortgage or mortgages you are going to need.
And the second stage consists of mortgage lender conducting a further detailed check to see evidence of income and a regular affordability check.
Correlation between Deposit and Interest
The greater deposit there is, the lower the interest rate could be. This correlation is often times referred to as “Loan to Value” or LTV.
As an example, a $10,000 deposit on a $100,000 property, the deposit is 10% of the price of the property, and the LTV is the remaining 90%. The mortgage will be secured against this 90% portion.
Basically, the interest rate depends on LTV. The lower the LTV, the lower interest rate is expected to be. This is due to the fact that the lender prefers taking less risk with a smaller loan.
If you are in the market for residential mortgage financing contact us today. We’re always happy to help!
What is a Mortgage?
A mortgage is a loan taken out to buy property or land. They are commonly for 25 years but often the year term can be shorter or longer. The loan is ‘secured’ against the value of your home until it’s paid off. If, for some unfortunate reason, you can’t keep up your repayments, then in this particular situation the lender can repossess (take back) your home and sell it so they get their money back.
Affordability Analysis
Before putting down a mortgage, it is best to perform a quick analysis of finances. Calculating costs of owning a home is best, which includes calculating the following: household bills, council and other taxes, maintenance and insurance, so on and so forth. The lending party can often demand seeing proof of your annual or monthly income along with debts. The lender, which can be a bank or an organization, will want to make sure that you are well able to keep up with repayments if, in such case interest rates rise. The lending party also reserves the right to deny offering a mortgage at all if they think that the repayments won’t be repaid.
Where to Get a Mortgage
A mortgage broker can perform a comparison of different mortgages presently on the market including those mortgages which are not offered directly to customers. Often times, a broker looks at mortgages from the ‘whole market’ instead of looking at products from a number of lenders.
Applying for a Mortgage
Applying for a mortgage is often broken down into a two-stage process.
The first stage often consists of calculating how much you will be able to afford, and which type of mortgage or mortgages you are going to need.
And the second stage consists of mortgage lender conducting a further detailed check to see evidence of income and a regular affordability check.
Correlation between Deposit and Interest
The greater deposit there is, the lower the interest rate could be. This correlation is often times referred to as “Loan to Value” or LTV.
As an example, a $10,000 deposit on a $100,000 property, the deposit is 10% of the price of the property, and the LTV is the remaining 90%. The mortgage will be secured against this 90% portion.
Basically, the interest rate depends on LTV. The lower the LTV, the lower interest rate is expected to be. This is due to the fact that the lender prefers taking less risk with a smaller loan.
If you are in the market for residential mortgage financing contact us today. We’re always happy to help!