Why Do Mortgage Rates Go Up and Down?

A simple guide to understanding why rates go down or upThinking of buying a home? Interest rates related to mortgages are known to go up and down frequently, changing each week and even fluctuating dramatically as the decades roll on. Why is this?

1. The Federal Reserve

The Federal Reserve is responsible for keeping the balance between the nation’s unemployment rate and inflation. When the economy begins to not do so well, and a higher number of American citizens are unemployed, rates lower. On the other hand, when the economy shows signs of progressing well, mortgage rates are higher in order to protect this balance.

2. Competition Between Lenders

In some areas, the number of borrowers is lower or the market is known as “a buyers’ market.” Those who are selling homes, or lenders offering loans tied up with mortgage rates, are dealing with far less potential clients and a higher amount of competition with each other. This is when mortgage rates will be shown as lower in these areas. On the contrary, when there are far more buyers than there are lenders or other means of home loan competition, mortgage rates may be seen as higher.

3. The Nation’s Economy

As mentioned earlier, mortgage rates and their fluctuation largely depends on the economy and keeping a good balance throughout the nation. Therefore, the state of the economy is a very significant factor in interest rates at any given time. The number of unemployed individuals contributes to the economy and rate fluctuation, as does the amount of individuals demanding a home to live in. Simply put, if citizens are not doing well financially, they are far less likely to buy a home. And if fewer individuals are able to purchase a home or are seeking to apply for home loans, mortgage rates will differ than when more citizens are seeking to buy a place to live.

4. The Economy of the Globe

A surprising contributor to the fluctuation of mortgage rates is the global economy. If foreign concerns, such as outside fuel costs, contribute to the boosting of our nation’s economy mortgage rates are likely to increase. Of course, the opposite is true – if foreign affairs contribute to the fall of the economy’s success rates are likely to drop.

In conclusion, there are a variety of factors that determine whether or not mortgage rates rise or fall. Therefore, examining the economy and the rates in your area will aid you in selecting the right time to purchase a home.

Article donated by https://mortgagebrokermareeba.com.au/

admin / April 16, 2019 / Mortgage Brokers

What is a Mortgage Broker

What Is a Mortgage Broker and Why Should You Use One?

Are you planning to purchase a house with the assistance of a mortgage broker but are on the fence because you do not know about their role and whether they can be beneficial? Well, if you have decided to purchase a house and would like to qualify for a loan that meets your needs, then this read will give you a better understanding on the array of benefits that come with using a mortgage broker.

What is a mortgage broker

So, what is a mortgage broker?

Simply put, a mortgage broker is a middle person who brings mortgage lenders and borrowers together. Over the course of a loan process, the specialist handles the whole correspondence between you and the lender and ensures that it runs without hiccups. In other words, you’ll have no direct contact with the lender and the entire communication will be channeled through the broker.

The mortgage broker does not rely on their funds to lend you the money, but rather compile the required paperwork from you and pass it to a bank or lending institution for underwriting as well as approval.

Now that you have learned the role of a mortgage broker, here are some reasons to use their services.

Benefits of Using a Mortgage Broker

They Give You Choice

An excellent mortgage broker has a huge panel of lenders and numerous varying loan types for you to choose from. This gives you the ability to pick one that is best suited for your needs.

Save You Time

Given the numerous options available in the mortgage world, it can become quickly overwhelming trying to figure out which is best for you. Of course, you can conduct research on the subject, lender and their products on your own, but if you are looking to save time, then it’s best to work with a mortgage broker.

Help Avoid Pitfalls

Most mortgage products out there seem to offer excellent deals but have hidden fees, charges and penalties that may not be easy to spot if you do not have knowledge of the field. Also, some may not offer flexibility in the future, which may put you in a hole that hard to climb out from. A reputable mortgage broker can help you avoid taking a mortgage loan that you might regret down the road.

Find The Ideal Loan

The best deal isn’t usually the one that comes cheap. Your mortgage broker will take a look at your situation and future plans and use them as a basis to recommend the loan that its ideal for you. Having an ideal mortgage that works for you can help you build wealth and even save money.

They Handle Everything

One of the most appealing things about working with a mortgage broker is that they will prepare your application, submit it and then work with the potential lender throughout the entire process up to settlement. All you will have to do is submit the required documents and sign the papers.

These are the many benefits of using a mortgage broker. Hope this read has been helpful.

admin / March 12, 2019 / Mortgage Brokers

Mortgage Insurance – What It Is And How It Works

Once you purchase a house, and you have a mortgage, you are going to need to get mortgage insurance. This is a type of insurance that is mandatory depending on what country you are in, one that is used to pay off the totality of the loan, which includes the principal amount plus interest that has accrued. You can typically get this from the insurance company that you are working with for your car insurance, or any other insurance that you have. It is recommended that you get multiple quotes from different companies just to make sure that you are getting the right price. Let’s discuss what mortgage insurance is, how it works, and where you can find the lowest possible price on this type of insurance.

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An Overview Of Mortgage Insurance

As mentioned earlier, mortgage insurance is designed to pay off a mortgage in the event that someone is not able to do so. In some cases, this could be the death of the individual that owns the house, and is also the person that is on the mortgage insurance itself. In the event that the mortgage needs to be paid off, the insurance company will pay the loan off, leaving the house free and clear. The other reason that mortgage insurance may be activated is due to a default on the mortgage loan. What you will need to do is find a company that is well-known for not only offering low prices and premiums for the mortgage insurance, but a business that is also reputable and will pay off the loan when the time comes.

How To Get The Best Deal On Mortgage Insurance

To get the best possible deal, you need to work with a broker that can sift through the many different companies that offer this insurance to find those that are offering the best deals. What you are specifically looking for is a company that will cover the total cost of the mortgage you have taken out, and offers you the lowest premiums available. Once you have found that, you can take out this insurance and feel confident that your mortgage will be fully protected.

After you have done your research, or if you are working with a mortgage insurance broker, you will soon have a policy that will cover the loan on your home. This is something that you should do in advance to purchasing a house. It is mandatory that you have this before you move in, requiring most people to spend at least a week contacting different companies in order to find the best possible insurance premiums. If you do work with a mortgage broker, or if you use a website online that can provide you with quotes, this will certainly speed up the process.

If you are based in Sydney we highly recommend Mortgage Brokers Northern Beaches.

admin / October 17, 2018 / Mortgage Brokers, Mortgage Insurance

Mortgage Comparison Advice

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Mortgage Comparison Advice

Finding the right mortgage for your needs can be a very lengthy process but can save you potentially thousands of dollars. Doing a mortgage comparison on a variety of loan options can help to get the best deal that suits your needs. Here is an overview of some things you should consider with your mortgage comparison.

Choosing between Fixed or Variable Loans?

A fixed mortgage rate means that you are locked into a fixed interest rate. This can be fixed for a varying amount of time and this will affect the interest rate that you will be able to get. This can be an advantage when the interest rates are low and can be beneficial to know exactly what your payments will be for the length of the loan.

A variable rate can either go up or down until the loan is cleared. Most mortgage rates with adjustable interests start with a period of 7, 5 or 3 years as an introductory period.

During the introductory period the rate is fixed, after that period, they can change depending on various factors within the financial markets. Adjustable rates may offer lower interests but  you should consider whether the market is at a low point and if it is likely to rise. It is important to take an interest rate in too account before choosing either of the two. There are also some more sophisticated options on the market that allow you to fix a percentage of your loan whilst having the rest as variable.

Finding the best Rate that suits your needs

Although finding the lowest interest rate is vital you also need to consider other aspects of the loan for your personal needs. You want to consider the flexibility of your loan and find one that will allow you to make additional repayments when you have funds to do so and re-draw on that when you need to. There are constantly new loan products on the market and it is important to find one that has the features that suit your financial needs.

One of the main advantages to a mortgage broker is there access to many lenders. This makes the loans comparison process so much faster and easier. In addition to that it is not uncommon for a broker to get you a better deal than you would have been able to arrange yourself, their service are free to you and they have software that can electronically compare loans from a number of different lenders.

If you are in the Cairns region contact Cairns Mortgage Broker to find out more about loan comparisons.

 

admin / April 13, 2016 / Mortgage Comparisons / 0 Comments

Why NOT Using A Mortgage Broker Can Be The Worst Decision You Could Make

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Buying a home is by far one of the most important purchases you’ll ever make. Most buyers spend weeks, maybe even months looking for the perfect house. But when it comes to financing that purchase, all too often, the buyers are willing to take the first loan that comes along.

This mistake can cost thousands of dollars in over paid fees and interest over the life of the loan.

Many buyers make the assumption that if they go into their local bank, they are more likely to get a loan approved because they are a current customer. They may think that local bank are faster. Both of these assumptions are also costly mistakes.

The truth is that a savvy buyer pays more attention to the loan than they do the house itself.

What options do buyers have? What is the difference between the local bank and a mortgage broker?

To sum it up, the difference is CHOICE and OPTIONS.

When you walk into a bank, whether it be a small credit union or a well known, nationwide bank, you are negotiating with one employee that is authorized to make you a mortgage offer. They’ll pull one credit report and decide whether they want to offer you a loan or not. If they choose to offer you a loan, they’ll most often give you one set of terms, and you can take it or leave it.

Mortgage brokers, on the other hand, do not work for a bank.

They work for you, the buyer.

Since mortgage brokers do not represent any one bank, this works in your best interests. How so?

Let’s take for example a buyer with a very good credit score and a down payment. A mortgage broker can shop around, so to say, for you, with literally dozens upon dozens of different banks, so that you get the best offer.

If your credit is not that great, you MUST use a mortgage broker! It would take you countless hours to go to all the local banks applying for a loan, not to mention it would pull your credit down even further with all of the credit inquires! In addition, you wouldn’t even know about nation wide banks that are willing to lend. However, armed with your mortgage broker, they can do all of the work for you, and your chances of getting a loan increase dramatically.

Why can we say the NOT using a mortgage broker could be the worst decision as you buy a home? Simply put, because you need to hire a broker to get you the best loan. You DON’T need a bank employee that represents the bank.

Using a mortgage broker will save you money, time, and frustration. And at the end of the day, you’ll be able to feel confident that you made the right choice.

admin / April 13, 2016 / Mortgage Brokers / 2 Comments

Top 10 Reasons To Use A Mortgage Broker

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Top 10 Reasons To Use A Mortgage Broker

Why do you need to use a mortgage broker when shopping for a home?

If you want to reduce the work and stress of obtaining a mortgage, save money and get a great deal, you should really consider hiring a mortgage broker. Here is a look at the top ten reasons why.

  1. Mortgage brokers are experts in their field and work on commissions that are paid by the lender. The better the deal, the more they make.
  2. When you visit a bank, you can only choose from the options they offer. Working with a mortgage broker gives you access to a whole network of lenders who will be competing to give you the best deal.
  3. A mortgage broker will work with you personally to make sure you get the deal that is best suited to your needs. You do not have to worry about having to settle for a “one size fits all” loan.
  4. Your broker works for you, not for a lender. You can feel confident that he is on your side and is always looking out for your best interests.
  5. Negotiating with a lender can be a nerve-wracking experience for most people. Brokers are used to negotiating, so they can haggle to get you a great deal.
  6. Lenders frequently offer deals and promotions that can save you a lot of money. A broker will be aware of these offers and can bring them to your attention.
  7. Working with a broker lets you pre-qualify for a loan so that you can lock in a favourable interest rate. This speeds up the process and can save you thousands of dollars.
  8. Unexpected obstacles can arise during the application process, and dealing with these can be tough. Your broker can help you avoid these obstacles or deal with them as quickly as possible.
  9. Every time you apply for a loan, your credit history is checked. Too many checks can actually lower your rating. With a broker, you only need to have your credit checked once, thereby preserving your excellent rating.
  10. Brokers are paid by the lender, not by you. You never have to worry about getting a bill from your broker, no matter how great a deal he finds you.

This has kindly been supplied by Mortgage Broker Central Coast. If you need help with a mortgage and are located on the Central Coast of NSW make sure you give them a call.

 

admin / April 13, 2016 / Residential Loans / 2 Comments