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Kent Clarke
Most people tend to take out a mortgage, then forget about it. The monthly payments go out from their accounts every month, but they probably couldn't tell you what the interest rate was if you asked! This is slack financial policy - it is easy to make sure you always have the best mortgage rate, and therefore pay the least interest. And believe me, over the years, even a fraction of a percent reduction in interest rates means big savings!
You need to get in the habit of noticing current interest rates. This is especially true if you are currently in the market for a new mortgage. Generally, mortgage rates track the central banking system's 'base rate', but there are a LARGE number of deals for new customers, including early year discounts, fixed rates, capped rates and so on. If your mortgage company isn't offering you a competitive rate, but other mortgage lenders are, confront them with it! Often they rely on your disinterest to keep overcharing you interest (excuse the pun!). When confronted, they usually crumble and will offer you a better deal rather than lose your custom.
Always use the APR when comparing loans. The APR (Annual Percentage Rate) allows you to compare the loans offered by different mortgage lenders in a like for like manner, and shows you the true cost of the loan as a yearly rate. This stops lenders hiding 'extras' (such as upfront fees) behind a fog of low rate claims, and means you have the true rate to play with. generally, most house hunters get an approval in principle from their chosen mortgage company. This makes you more attractive to sellers because it shows you are serious, and have the financial wherewithall to proceed should you decide to try and buy their house. It will also give you a firm indication that of what your budget is (although most lenders have slackened their rules in recent years, they still apply SOME rules!). This pre-qualification will keep you in the right price bracket too, and stop you wasting time on properties beyond your reach. If you meet the lender's criteria, try to lock in a rate. This means the lender promises to hold their offer for you at a certain rate for a certain time while you proceed with the purpose. Variable rate mortgages, more popular in Europe, can be crippling if rates rise from the historically low rates prevalent at time of writing.
For the next step, consult www.mortgagedown.com and get that mortgage down!
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