Fierce competition among mortgage lenders in recent years has brought great news for consumers - Banks and companies scrapping of the companies has only led to a greater depth of choice and value for almost every type of borrower, from those who seek to obtain a mortgage for the first time through those looking to remortgage their existing one.

In today’s market, the traditional one size fits all type of mortgage has long disappeared - the borrowers now have individual needs and goals, not to mention the history of credit, too! It is true that, regardless of their credit history or personal circumstances, there are mortgage products to fit almost any type of borrower.

If your mortgage requirements are less than conventional, you may experience difficulty in obtaining mortgage financing through the usual channels, by way of approaching the High Street banks and companies.

High Street lenders have been the traditional preserve of the borrowers with impeccable credit records - many of these lenders will be very eager to deviate from their ideal customer profile. In many cases where a borrower has a blemished credit history, an initial computerized credit scoring system will result in a denial.

There is a now a huge selection of specialist / sub-prime mortgage lenders, many of whom who are willing to consider most types of mortgage application - those with the worst records of credit, the self-employed workers borrowers with little or no proof of income.

In many cases, borrowers are being redirected to the world the loan specialist after being rejected by a High Street bank or building society for whatever reason. These types of specialized lenders, once considered a niche market, have become widely recognized throughout the mortgage industry and the rise of providing an important role.

Many specialists / mortgage lenders will only be accessible through an intermediary, such as a mortgage broker, independent financial adviser or mortgage network - Customers must first go through these channels, in order to access many of these products to mortgage lenders.

Self-employed mortgages

Employed borrowers have always been treated differently from their counterparts employees. They have always been penalized for their status in the past, usually in the form of higher interest rates, or an interest rate of freight. Self-employed borrowers are still perceived by many banks and corporations as a greater credit risk unless you are able to provide backup of their income in the form of two or three years’ accounts and six months of account statements bank.

There are many specialist lenders who recognize the enormous volume of self-employed persons in the labor force, well over four million and, therefore, make greater efforts in accommodating the needs of these people loans. They can not offer the lowest rates in the market, though their mortgages are still competitively priced and can offer greater flexibility too.

Buy to Let mortgages

Remortgage to buy products that have long been the preserve of the specialist lender. The purchase to let the market has attracted a large number of owners in recent years as the escalation in housing prices and greater need for investment in low-risk property has a very viable option in which to invest in.

Many major lenders have jumped on the purchase of car for that however it is worth bearing in mind that specialized lenders often have more experience of buying for the market.

Approaching a mortgage broker can be a great place to start in the investigation of its specialist lending needs. As mentioned above many of the leading specialized lenders are available only through an intermediary, however, the majority of mortgage brokers have access to a wide variety of different lenders.

A mortgage agent may charge a fee for services there, however, this can sometimes be negotiated in the light of the fact that most also receive a commission on the conduct of mortgage lender for its implementation.

You also notice when doing their research that most of the specialized lenders are in fact lending arms of major banks and major building societies.

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Buying a home is a confusing process, and one of the most confusing prospects is settling on an interest rate. Even when you decide what type of loan you want, you find you still have options as to what rate to lock. Some of these options stem from whether or not you buy down the rate by paying a point. A point is a fee that equals 1% of the loan amount. For instance, if you are buying a $100,000 home, and your note amount is $97,000 (because you’re putting $3000 down), a point would cost you $970.

You can see the points you are being charged on line and 802 of your Good Faith Estimate, and later, on the same line on your HUD-1. This line item reflects fees known as “discount points”, but they truly aren’t interchangeable with origination fees (line 801) even if they sometimes serve the same purpose. If you choose to pay a discount point, you should expect a lower rate than if you didn’t. So, if you’re quoted a rate of 6% 0 + 1, you are paying 1 discount point. If the quote is 6% 1+0, you’re paying an origination fee. And 6% 0+0? You’re paying no fees in either form.

What’s the difference between an origination fee and a discount point? Well a few things. Technically, an origination fee is what you pay the lender or the organization that takes the initial application and processes the loan. A discount point is specifically paid to the lender to buy down or permanently lower the interest rate, and it’s usually a percentage of the loan amount. You can also pay additional points to buy down your rate, not just a flat 1%. You can pay a .5% or 2%. It just has to make good economical sense for you. And it shouldn’t be robbing you blind.

From a tax standpoint, there isn’t much difference. An origination fee is generally tax deductible as long as it’s charged in the form of a “point” or percentage of the loan amount. However, you may ask your lender to charge you a discount point versus an origination fee to keep things neat and simple. Sometimes mortgage lenders charge you an origination fee when technically they should be charging you a discount point. But they’re collecting all the fees anyway and happen to be giving you a lower rate. It really matters most if you are working with a mortgage broker. Mortgage brokers can’t be paid discount points, only origination fees or broker fees. They can collect discount points to lower your rate, but the discount point has to be paid to the mortgage lender with whom they’re doing business. And, this information should be disclosed properly on your Good Faith Estimate.

A typical trade off is that a 1% discount point equals about .25% reduction in interest rate. You should be able to easily decipher whether or not it’s worth it to buy your rate down. How long do you plan to be in the home? If not that long, then maybe you should think about a 0+0 quote. If it’s your forever home, then dipping into your wallet and footing higher closing costs might be worth it in the long run.

However, if you look at your Good Faith Estimate and it seems you’re paying too much in origination fees and/or discount points, then you probably are. Say something to your lender. And if he doesn’t budge, you may want to look elsewhere. Go with your gut instinct or call another reputable lender and get a second opinion.

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A penny saved is a penny earned “… or so the old proverb goes. Of course, the value of a penny has changed little since the time when his mother offered her wisdom on the value of keeping what you earn. Today, you could save thousands of dollars simply for the right mortgage decision. If you’re like most Canadian homes, your mortgage is a gold mine of potential savings.

In recent articles, we talked about the importance of your mortgage as one of their most important financial decisions. We explored the value of seeking professional advice from a mortgage if you’re buying a house or the renovation of an existing mortgage.

Today, let’s take a look at the bottom line: The savings can be enjoyed by the right mortgage decisions.

It is the primary function of a mortgage broker to find the right product for their personal situation. A mortgage is a financial intermediary and professional - as its investment adviser - he or she wants to understand his personal and payment preferences. Your mortgage broker has access to a broad spectrum of lending institutions, so that you can make a valuable comparison shopping for the right combination of features, prices and mortgage options.

All these options offer significant opportunities to save money over the life of your mortgage.

If you’re like most of the owners, who are focused, for good reason - in the search for the best for your type of mortgage. Your mortgage will agent can provide the best range of options rate and terms. If a mortgage broker that you can get one percent of the rate of displacement, which could translate into more than $ 13,000 in interest for $ 100,000 in a 25-year loan amortization schedule. However, if you believe that most mortgage rates are basically the same from one institution to the next, and then consider the fact that even one eighth of a point of difference in the rate can offer significant savings in the duration of their mortgage.

But it is also important to look beyond the fee. There are other ways to find savings on your mortgage. Your mortgage broker is updated on market trends and new opportunities … as well as some of the tried and true ways to save money on a mortgage.

Do you receive an annual bonus at work? You can use this voucher to pay the principal of your mortgage. If this strategy consistently over the life of your mortgage, you can save thousands of dollars in interest by paying off their mortgage before.

Are you paid bi-weekly or bi-monthly? Consider a change from the usual monthly mortgage payment. Configure your mortgage payment schedule to match your pay period. Once again, you can shave years off your mortgage, and enjoy thousands of dollars in savings.

In the coming weeks, we’ll see some of these savings opportunities in more detail. In the meantime, consider the old adage penny again. How long is their value? Saving time is a major, unexpected benefits that customers say they have enjoyed when opting to work with a mortgage broker. Above all, a mortgage broker is an expert in customer service, and that means that your agent takes care of every detail of your mortgage research and negotiations on their behalf.

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