Saturday, May 11, 2013, AM | 8 Comments
Housing values are expected to become sluggish in the coming months, with investment analysts predicting a reduction in the growth of bonds by between two and four percent. On a happier note, interest rates are being pushed down, giving investors the chance to inject their investment efforts into property – an asset that forms a crucial foundation for a stable portfolio.
Profitability is remarkably responsive to the terms attached to financing. There are many tactics that help cast borrowers into a more positive light in lenders’ eyes.
Some strategies improve financial histories after years of effortful change, while others can almost instantly bring better mortgage terms.
Improving Credit Scores
Mortgage lenders’ main concerns lie in assessing how profitable potential debtors are. Credit reports can be honed over the short and long term and are the first step towards securing better terms and reduced mortgage rates.
Fact checking and electoral roll registration are effortless ways to improve this core monetary record. Errors in employment records or tenancy can play havoc with an otherwise glowing rating.
Over the long term, debt consolidation can push scores down to more attractive lows if it is done tactically.
Consolidating debt beneath accounts held with reputable vendors for over two years will improve your rank.
It is only possible to keep a credit report alive by actively borrowing. It is unnecessary to continuously keep yourself weighed down by heavy debt, but maintaining a small amount of credit keeps your score in the green.
The most profitable way to use credit to build a better rank is through mortgages, because borrowing for the sake of an asset that will produce returns is excellent financial practice.
Comparing Mortgage Lenders
Few people buy major assets without comparing products. Choosing a mortgage should be no different. The variety of mortgage types has widened over recent years, making comparisons more complex.
Fixed and adjustable rate mortgages are simplest to compare by using a mortgage calculator to map out the entire repayment amount according to terms, deposit and monthly repayment amounts.
Hidden costs should be factored into these projections. The only reliable way to compare mortgages from different lenders is by looking at their terms for the same products. It’s pointless to compare one bank’s fixed rate bond against another’s adjustable rates.
Anticipate the Future
The risks involved in tracker rates need to be considered. A sturdy economy that is expected to stay at its peak during the mortgage term makes tracker rates easier to stomach.
When the housing market is difficult to predict, fixed rates offer a level of financial security that is worth paying for. In the long run, if interest rates skyrocket, that costlier fixed rate mortgage may bring significant savings.
Raise Your Deposit
Putting a higher deposit down initially is one of the most reliable ways to push total interest payments down. A bulkier deposit not only chops away at interest payments; it also hikes up your odds for being approved for a bond.
The savings made on upfront payments are not directly apparent, since they are generally made over the long run through a shorter repayment term.
Sam Edwards is an investment analysis specialist who writes regularly about methods of finding reduced mortgage rates for greater returns potential.