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Five Common Mortgage Mistakes To Avoid

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The fact that there are many different factors involved in getting a mortgage leaves the door wide open for making mistakes.  Some mortgage mistakes won’t really have too negative an impact, while others will cause a lot of expense as the mortgage matures.

Here are five common mistakes people make when getting mortgages.

1.    Ignoring the Rates

Mortgage rates are changing all the time, sometimes within the same day.  When you are seeking a mortgage, assuming that rates are going to be the same when you sign, as they were when you started looking is a big mistake.

Before you finalize your mortgage and sign your name, verify that the mortgage rate that you agreed upon is in fact the one that will be applied to your mortgage.

2.    Not Shopping Around

Rates and fees vary among lenders, just like they do with car insurance providers.  Many people assume that all lenders are required to quote the same rates and fees, but this is necessarily the case.

Take the time to shop around, and don’t be afraid to negotiate a little on your own behalf.  There are many different lenders out there, all vying for your business.  If you want to simplify the process, consider using a mortgage agent or broker.

3.    Not Knowing Basic Terms

It’s a good idea to know most if not all of the basic mortgage terms when you’re trying to get a mortgage.  Not knowing may increase confusion and you might miss something as the process rolls along.

If you aren’t using an agent, take the time to educate yourself so you are in the know.

4.    Forgetting About Closing Costs

Once you get a mortgage and the whole process is set in motion, it’s easy to let your excitement get the better of you.  Along with your down payment, closing costs are also factored into the mortgage.  Ask your lender ahead of time and you might get an estimate of what this number will actually be.

Take a good look at all of the fees you have to pay, and don’t be afraid to ask what they are if you don’t know.  It is you that is going to be paying it all back, after all.

5.    Choosing the Wrong Mortgage

There are many different mortgages and mortgage products out there, and it’s pretty easy to choose the wrong ones if you don’t know what you’re doing.  In most cases, taking a look at your future plans will help guide you.  If you plan to move to another city or country in 10 years, choosing a 30-year mortgage might not be the best option.

Take your financial and lifestyle situations into consideration and you will choose the right mortgage more often than not.  Don’t be afraid to ask for a little help if you need it, too.

This post is brought to you by Henry Stiller. He relies on http://www.bensonmortgages.ca/. They provide expert tips and advice on home mortgages and offer a dedicated team of brokers to find clients the best mortgage rate in Toronto.

Improve Your Chances of Securing a Mortgage – Ways to Do It

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One of the biggest financial decisions a lot of people are likely to make is the choice to purchase a home. The reasons may vary from one person to another. Some choose to do it because they want to build equity and gain a big tax break, while for others it is a way to accommodate the needs of their growing family.

Whatever your reasons are for deciding to purchase a home, you surely are aware that this involves a lot of money. And if you do not have enough cash reserves, you are likely going to apply for a mortgage in order to finance your desired property.

When you apply for a mortgage, there is a lot of hoops that you have to jump through, especially now that most lenders have become stringent with qualification requirements. However, if you really are convinced that this is the best option to secure the house where you would like to settle with your family, below are some tips you can follow to better improve your chance of being approved for a mortgage.

Learn the ropes

Information about mortgage is vast and the process of application is complex. Due to these, it is easy to get lost if you have no idea what you are up to. So if you want to make everything to work on your side, become an informed borrower. Finance websites, mortgage books, consumer workshops and seminars as well as financial planners and mortgage brokers are all available to help you get an insight about what is likely to be one of your major financial transactions. Hence, take advantage of them and educate yourself to make the loan process smoother, less time consuming and less stressful.

Cut down your debts

When applying for a mortgage, most, if not all, lenders will assess your ability to keep up with the monthly mortgage payments. As such, if you incur a lot of debt compared to your income, you are likely to be rejected. To avoid this, start reducing your debts – credit cards, car monthly payment, student loans, etc. – before you apply for a mortgage. The ideal debt you should incur must be equivalent to 12% of your income or lower. Remember that the debt-to-income ratio you have will significantly increase when you purchase a home, so reducing your current debts will make it easier for you to manage your mortgage payments later on.

Know where your credit stands

Mortgage lenders usually look at three things from applicants: a steady flow of income, down payment and a solid credit history. If you are not sure where your credit stands at the moment, start figuring out what your credit report has to say about your ability to pay a mortgage. Know if there are errors, omissions and other details that might be hurting your credit. If you find any inaccuracy, make sure that you address it immediately.

Put off large purchases (avoid incurring new debt)

Lenders thoroughly check the applicants’ credit reports by the time they apply and before closing. Hence, if you apply for a new credit card or spend a sizeable amount of cash on something through a credit-based transaction, this can be a red flag for lenders. It is best to stay away from any form of transaction that will incur you a new debt until you have secured your mortgage.

Prepare a large down payment and build your cash reserves

Although some mortgage companies will allow buyers to buy a home for a small down payment, paying at least 20% of the home’s price upfront is the most preferable for them. So if you want to make sure that you will be qualified for a mortgage, consider saving a sizeable amount of money for your down payment before applying. It will also be wise if you build your cash reserves to show lenders that you have the capability to pay the mortgage and at the same time will help protect yourself in case of emergency.

Get all your documents together

Lenders would like to be supplied with bank statements, credit documents, income tax returns and other important financial documents that will prove your creditworthiness. Hence, to avoid going back and forth, prepare all the necessary documents before you head on to a mortgage company. Better, yet, check the requirements first to know what paperwork you are supposed to provide them with.

How To Professionally Manage A Commercial Rent Review

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If you are a commercial tenant, finding the right property can be crucial to the success of your business whether you are an office, retailer or even an warehouse.

Premises in the right location, adequately sized with good facilities cannot just help to attract and retain quality staff, but also play a major part in helping a company grow. Therefore, once you are established in the location, you are unlikely to want to find some-where new, unless you are forced to.

For landlords of commercial properties, keeping a good tenant is equally important. A company prepared to pay the market rate and who doesn’t default on their rent is invaluable as an empty building simply burns money.

However, regardless of how much both parties would like the situation to continue unchanged, most leases provide for a rent review at regular intervals, and this can cause friction in an otherwise amicable relationship.

Here’s a guide to ensuring any rent review is conducted professionally and with the best interests of all parties in mind.

Rent reviews – why bother?

If all parties are happy, it can seem like a very bad idea to rock the boat and jeopardise the relationship by carrying out a rent review.

But regardless of how well the landlord and tenant get on, the nature of the relationship is business and that means the landlord is entitled to ensure they are receiving the right level of income for the premises they are providing.

In the current economic climate where mortgages for both domestic and corporate premises are much harder to get approved, the demand for rental properties has sharply increased. This has led to a shortage in the market; a state of affairs which has sent the rental rates soaring. It is therefore only fair to the landlord that the rates are reviewed periodically to make sure they are in line with other similar properties in the area.

Check the contract

The exact nature of rent reviews and when they can be carried out will be specified in the contract so it is important to take a closer look.

If market rates have increased but a rent review is not due, the landlord cannot simply hike up the price because they are aware they are receiving less than others in the area. A contract protects both parties; it stops the landlord from simply increasing the amount as and when they see fit, and also schedules rent reviews at reasonable intervals to ensure the tenant is not paying far less than they should for prolonged periods.

Although technically a rent review means that the amount payable could reduce, in practice many contracts actually specify that a reduction is not permitted. This means that if no increase can be justified, the rates will not drop, even if other similar properties in the area are being rented for less.


How does it work? 

The best way to manage a rent review is with the help of professional commercial property specialists.

They can help to determine the correct rate which should be charged for the premises when the rent review is due, a process which is often far from simple and needs to take into account a multitude of factors including local pricing, case law and market factors.

Because the amount of rent payable can have a significant impact on the profits of a business, many tenants dispute the results of a rent review, which means it is even more important to ensure it is carried out independently and professionally.

If the tenant and the landlord cannot reach an agreement about the increase, it is possible to obtain a  Third Party Valuation. The right to request this should be set out in the contract. Using a commercial property expert can help you present your case to the Third Party, whether you are the tenant or the landlord. Having the experience in pulling together the relevant arguments, using technical aspects of the contract as well as quoting case law can make a compelling point of view which could potentially influence the outcome of the arbitration. And unless you have expertise in those areas yourself (which is unlikely) the only way to access this is via the use of a professional commercial property service.

To provide both parties with the reassurance that the suggested figure has been calculated fairly and not inflated falsely, getting professional help is an excellent idea. Commercial property consultants can be retained by either a tenant or a landlord but either way should be committed to reaching a fair result for everyone.

Conclusion

Samantha Wood is an experienced Financial Services writer and enjoys writing about lease and rent reviews.

Presentation Tips to Help your House Sale

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If you are selling your home, then hopefully you will have quite a few people coming to view your home. As lovely as you believe your home to be, there are some presentation tips that you can employ to make your house more appealing to buyers. Today we will go through some simple presentation tips to help you with your house sale.

1.)  The front and the entry

The old saying “first impressions count” is never as important as it is when you are selling a highly valuable and life changing purchase such as a home. For this reason, the front of your house is absolutely essential if you want to attract serious buyers. Interested buyers rarely go to the effort of booking an appointment to view the interior of a house until they have driven or walked past it and possibly even peered through the windows first. The front of your home is also the part that is most likely to be photographed and advertised: so if you are serious about selling, then get serious about the front of your home and make sure driveways are clear, gardens are manicured, and the front pathways are swept and appealing.

2.)  Personality free

One thing that really puts off prospective buyers is a home in which the previous owner’s are plastered clearly over all four walls, in the form of highly personalized décor.  The more neutral you make your home, the more people you are likely to appeal to; as you are presenting buyers with a blank canvas upon which they can paint their homely imaginations and aspirations. For this reason, give your home a good once-over with neutral paint and neutral carpets and make sure it is clean and fresh smelling. This way your home will appeal to customers no matter what their age, or aspirations are.

3.)  Smell

Smells are an essential part of how human beings decide whether or not they can trust something. When something doesn’t smell quite right, we are almost instantly put off by it: and this rule applies not just to food, but to people, items and rooms. For this reason, it is important that your home smells the way it should do – so sweet, baking smells in kitchens, laundry smells in washing areas and fresh smells in sitting areas and sleeping areas will all make your home significantly more appealing to buyers, than any curry, fish or other smells that your home may have collected whilst you have been living there.

4.)  Shiny surfaces, taps, drains and bins

Any shiny surface in your home (typically taps and drains) will have to gleam and shine in order to give the impression of good hygiene to anyone that is viewing your home. Because the home’s plumbing system is traditionally the most significant indicator of hygiene, simple touches such as shiny surfaces around these areas will give the impression that the house is clean. A messy home can be forgiven (although of course you should avoid this for buyers) but a dirty house is unforgivable,: so shine, polish and sparkle all taps, drains and dustbins to show your buyers that they are looking at a well kept, germ free zone.

Ben loves property and currently works for Guernsey estate agents Livingroom.

How is the Global Economy Impacting on Property Markets?

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Illegal Mortgage and Real Estate FeesThis article looks closely at the continuing influence of the global economic downturn in terms of worldwide property markets.

Boom to Bust

When the global economic bubble burst so spectacularly in 2008, it was the property markets that collapsed almost as soon as the banks did so. Four years on, the inability of global property prices to begin to recover is still being caused by the economic mess that is currently being dealt with across the world.

Sure enough, there are a number of signs of recovery, and in fairness, they have been relatively consistent in appearing in the years since 2008. The problem is that as soon as there are signs of hope and recovery, something occurs to knock the shoots of hope back into the ground and the world finds itself at square one once again.

How is the economy continuing to damage the property markets?

Lack of Confidence

This the factor than is undermining the whole world, not just the property sector. There is such a lack of confidence in anything linked with finances that an expensive acquisition or investment such as property is out of the question in most cases.

Given the link between the economy and property prices, even consumers who are spending less money on clothes are having an indirect impact on global real estate.

Even four years later, with austerity measures put in place and positive action generally being taken, there is no confidence at all in financial markets, at any level.

Low Demand Investment

Demand for property is low, so people are not looking to invest in it. During times when money is tight, investors have taken their capital and carefully placed it into areas where they know they are still likely to see a return despite turmoil across the rest of the world.

Therefore, utilities, environmental initiatives, food, and research departments get all of the money, as these are the things still seen as a priority by the global population. Whether the economy can help boost the property markets, or the property markets picking up will help the economy is the centre of much debate and is unlikely to ever get definitively answered.

Is there any solutions that will work, or light at the end of the tunnel?

Moving Forward

It would seem that, in reality, the property market is at the mercy of the wider economy, and until there are increased investment levels and consumer confidence around the world then the situation is likely to remain the same.

Perhaps one brave investor, or investment group, putting a lot of capital into the property markets would help give it some impetus, however it would take a lot of money and a high degree of risk to make this approach pay off.

Harworth Estates are one of the largest landowners in the UK with access to commercial property for rent and units to let.

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