Tips from a Mortgage Advisor
Unlike other types of loans, a mortgage is secured against your home so if you don't keep up with monthly repayments, the bank or company that lent you the money could apply to a court to repossess your home and sell it to recover the money lent. Here are some tips from a mortgage advisor:
- The first thing to consider is your deposit. The deposit is the amount of your own money that you put towards buying your home. If you're not ready to buy just yet, you're usually better off waiting and saving some more. Why will you do that? It’s because a larger deposit will usually mean it's more likely a lender will agree to your mortgage even if you currently own a home. Adding a further contribution to the money when you sell could really help. You'll borrow less and can pay less interest overall and this improves your loan-to-value ratio when buying a house.
- When it comes to paying back your mortgage, you've basically got two options for repayment mortgage. An interest-only mortgage with a repayment mortgage- the payments you make pay off the interest to you each month and a little of the debt. So when your mortgage ends, you'll have paid off everything you owe. This way of paying off your mortgage is thought to be the easiest to understand and the least risky. With interest-only mortgages, your monthly payments will tend to be lower but you need to realize that you're only paying the interest on the amount you've borrowed. So you're not actually reducing the loan itself. This means that at the end of the mortgage term, you still owe the full amount of the loan. If you go with an interest-only mortgage, you need to have a plan to pay off the loan such as investments or savings because if you can't pay the mortgage in full at the end of the term, you could risk losing your home.
- When you apply for a mortgage, a lender will review your application based on your income, outgoings, as well as your credit history. They'll arrive at a figure they are prepared to lend you and that you can afford. If you're a first-time Calabasas luxury home buyer, it always helps if you can show you've been paying regular rent for a similar amount that you're hoping our mortgage payments will be. You could also get a copy of your credit report to make sure your credit history is in good financial shape. Ready to buy a home? Speak with a trusted Calabasas real estate agent today.