Shopping for a mortgage is a big decision and one that you should definitely put some time and thought into. For most people, a new home is the single biggest purchase that they will make in their lives, so it makes sense that they would want to get a good deal on it – and the difference in value between different mortgage packages can equate to tens of thousands of dollars over the lifetime of the mortgage.
When you are looking for a mortgage broker, there are many things that you should consider. Firstly, you will want to look at your credit rating. If you have a good credit rating, then you can get a good deal on a mortgage from a relatively mainstream lender – either a broker or your bank. If you have bad credit, then you can still get a mortgage, but you will be limited to buying from either your bank (since you have an existing relationship with them) or a sub-prime lender.
Check the history of the mortgage broker. Do people actually like working with them? This mortgage broker in West Covina has a 5 star-rating in yelp: Super Mortgage Bros Yelp Page. Be sure to check what actual people have to say about them. How about their Facebook page? Some people opt to review businesses Facebook page instead. As with our previous example, this West Covina Mortgage Broker has their Facebook page as well. Be sure to check them all out. Better safe than sorry.
Once you know what kind of lenders you are likely to be able to get a mortgage from, you can start to think about how much you can afford to borrow, and what sort of house you could get for that money. The days of being able to get a mortgage for the full value of a house are long gone. These days, you will need to put down a deposit to get a decent sized mortgage with a reasonable interest rate. There are some lenders that might offer high percentage Loan To Value mortgages, but you will get a far better interest rate if you can put down a deposit of 10-20 percent or more.
You should think about the kind of mortgage you are taking out. Do you want an interest-only mortgage (in which case, how will you pay off the mortgage when the loan ends? Will you be paying into a separate policy to pay off the loan?), or do you want a repayment based mortgage?
In addition, think about the interest rate. Do you want the mortgage to be fixed, or do you want it to be variable? Fixed rate mortgages tend to have a slightly higher interest rate at the moment that you take them out, but you know that for the duration of the fix the interest rate (and therefore your repayments) will remain the same. Variable rate mortgages will change with the economic climate – and so will your repayments. This means you are gambling that the mortgage repayments will either stay the same or go down. If interest rates increase massively, will you still be able to make the repayments? Remember that if you do not make the repayments, you may lose your home.
A good mortgage broker will work with you to help you find the best possible deal and to ensure that you are not taking on a mortgage that you would be unable to pay off. Ask the broker what packages they have, and what insurance they offer. Look at the policies they have for missed payments, and do everything you can to ensure that you are not going to end up being faced with a hefty penalty or no options for your mortgage to be temporarily paid if you fall upon hard times.
Another great resource are directory sites like Manta and SuperPages. These directories list out different businesses by categories so it is sometimes easier to search.
With such a bit purchase, the philosophy of planning for the worst and hoping for the best makes sense. Ask your friends and family who they got their mortgages from, and speak to a financial advisor as well, so that you can get impartial advice tailored to your situation.