Planning your Interest rates
Buying an investment property or home will require you to borrow 80-90% of property value, to finance your property. The interest included in the loan is the major issue you need to take care of. Though the interest rates are at its lowest for now, most of the economists and lenders have predicted an immense hike in interest rates sooner or later.
Before things get out of hand, borrowers need to consider various factors which may prevent you from being affected by the rising rates in near future.
Lock your interest rate
Comparing the interest rates and lenders and choosing the lowest one alone is not enough. There are chances that the lender may increase the interest rates frequently in future. To avoid this, you need to pay a lock rate fee up to 0.20%, depending upon the lender. After that, the interest rate that you have applied for is locked, and the lender won’t be able to raise the rates.
It’s either a better deal or a switch
No lender would want to lose the client if negotiation is done right. As switching to a new bank might take weeks and a lot of effort, you can choose to talk with the existing lender first, for a better deal. If the negotiation goes well, you can choose the existing lender, otherwise there is always an option of switching your lender. It is always a wise decision to think and act.
Get the shortest loan term you can afford
Shorter term loans will generally save you a lot of money. Although the repayments amounts would be higher, the risk of fluctuating interest rates in the long run future can be minimized. The interest rates are also usually lower in case of shorter-term loans. So, as per your affordability, it is better to opt for shorter term loans.
Finance pre-approvals
The time frames required to address your requests vary within banks. The interest rates and loan amount chosen would be of no use if the bank doesn’t approve your request in time. Because by then, the interest would have already fluctuated. So do not wait weeks for finance pre-approval.
Thus, you must be cautious while planning for the home loans. It is advisable to get a helping hand from the best Mortgage brokers, who can plan a good strategy so that you won’t have to spend needless money. You can always remember Biz-Box, as we focus on the client’s satisfaction, with a hassle-free process.
