Ask the Lender or Broker the Right Questions

Whenever you apply for a mortgage, there are some important questions you should ask the lender or mortgage broker - it's not purely a case of choosing the loan with the lowest rate of interest! Ask the following questions and then you can measure products and their terms and find the most suitable mortgage loan for you.

What conditions do I need to comply with to be granted a particular loan?
Loan requirements vary from company to company with several quoting more agreeable loans than others. Typical factors that can have an effect on your suitability are your salary, your credit record and credit score, and your employment etc.

What is the smallest loan-to-value (LTV)?
The loan-to-value is based on how much you want to be lent next to the worth of the house, and the amount of down payment you have available. The more reduced the loan-to-value (LTV), the greater number of products that should be available to you, and at better conditions too. For example, if it is within your ability to put down a 20% deposit (this would be an 80% LTV) instead of a down payment of 5% which would have a less agreeable loan-to-value of 95%.

What is the APR (annual percentage rate)?
Because the annual percentage rate of the mortgage is frequently higher than the initial quoted rate, it makes it simpler to contrast diverse mortgage products established on the APR instead of the advertised rate.

Choosing the right loan

When thinking about a loan, there are many key matters to consider…

Low APR
So now, what is an APR? This means “Annual Percentage Rate“ and this indicates the actual rate of interest. Even though you could be aware of a loan advertising a x% APR, you may not necessarily be given it at the advertised rate as the APR extended is conditional on how big the loan is and occasionally the term length as well.

Your credit rating may also change the APR rate you are given.

Fixed and Variable Interest Rates
In the case of loans, a number of lenders now give fixed and variable interest rates. You should compare what is most appropriate for you - having a regular set sum being taken out of your account or one that could change as the Bank of England rates of interest climb and fall.

Loan Fees
When arranging a loan, quite a few lenders or brokers will pass a fee on to you. These extra fees can vary, so be certain that you pick the loan with the best fee.

Deferment Periods and Payment Breaks
While a payment break or deferment period (which is when there is a break between the time you get the loan and when the opening instalment needs to be made) looks great, keep in mind that interest will still be charged during this time, meaning that you will be responsible to pay a greater amount of interest in the long run.

Early settlement penalty
If you choose to settle up on your personal loan prematurely, then most often you will need to pay an Early Settlement Penalty. Normally, this will be close to two months' of interest charges.

When picking a personal loan, always find out what amount the Early Settlement Penalty will be seeing that you might just find a loan company who doesn't charge it.

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