Finance, Loan, Debt and Credit.

February 18, 2018

The Truth About Unsecured Debt Consolidation Loans

Filed under: Loan — Tags: , , , , , , , , — admin @ 12:46 pm


Drowning in debts as you read this article? Struggling to pay all of your loans which have become due and demandable? Giving up necessities just to get by? Feeling helpless because of the seemingly insurmountable obligations you have to burden?
Don’t consider filing for voluntary bankruptcy just yet. There are other things you can try that can solve your problem, or at the very least, lessen the burden you have to shoulder. One of these approaches is debt consolidation.
Debt consolidation pertains to the fusion of your debts into a single loan. This definition may sound simplistic, and other individuals may doubt the ability of this method to assist them with their monetary binds, but debt consolidation has positive outcomes that can assist an individual with financial binds.
Debt consolidation can prolong the date you need to pay for your other loans. If you have many debts which have become demandable, for example, you can consolidate them into a new loan with a new due date which will allow you more time to prepare for the same.
Many finance companies offer debt consolidation loans for beleaguered debtors. Consolidated loans are the one being sought after most of the times. After all, they bring about issues easier for the debtor. Apart from just thinking of a single debt, debt consolidation at the same time gives a particular loan a lesser interest percentage (in comparison to the full amount of the interest rates for the single debts involved), the same with the new maturity period that can prolong the date it needs to be paid.
Often, credit institutions that give debt consolidation loans ask for a mortgage from the person in debt, a type of safekeeping to guarantee fulfillment with the stipulations of the latest, integrated loan. This credit is secured against the house of the debtor.
Debt consolidation can merge several debts with high interest rates into a new loan with a significantly lower interest rate. Believe it or not, when we become remiss in the payment of our debts, their respective interest rates can kill our finances. We end up paying and paying our debts, only to realize afterwards that majority of our payments are just only suffice to cover the interests per se.
Debt consolidation makes financial planning less of a headache. You can take a break from worrying of your financial obligations. You can just basically face a single consolidated credit.
Debt consolidation is a common approach in managing difficulties of having numerous monetary binds at one time. Declaring for bankruptcy is an option to relieve yourself of your unsecured loans, but such should be treated as a last resort. Bankruptcy should only be considered after you have attempted to get unsecured debt consolidation loans with the help of experts in the field.

J Stromsteen has many years expertise in the finance, real estate, and insurance industry. She writes for the website Bush’s Depression where you can find detailed information on Unsecured Debt Consolidation Loans .

February 16, 2018

Use a Mortgage Loan Calculator When Comparing a Modification Loan Or Refinance Loan Mortgage Rate


Here are 3 common scenarios where using a mortgage calculator can help you decide what to do …

1.  Should I Refinance?

First, determine your main goal.  For example:  Are you more concerned with short term savings – (reducing your monthly payment now), or, do you want to save more money in the long run? .

For example. If you had a 30 year loan at 5% interest, and you’d been making monthly payments on it for the last 5 years (60 months), you’d reduce your monthly payment if you refinanced for a new 30 year period, say at 4.5%.

But you could still end up paying more over the long run.  The problem is you have no way of knowing that until all the related expenses are factored in.  And this is where a mortgage loan calculator can help you.  The calculator has places for you to input the various closing costs, fees, taxes, etc. And only after considering all the related expenses will you know whether or not you’re coming out ahead.

2.  How Much Income Will I Need to Qualify?

Nothing feels worse than finding the home of  your dreams and then being turned down when you try to arrange financing.  Once again, this is a case where using a mortgage calculator can really help.  Wouldn’t you rather know if you can qualify for the loan before you apply?

Here’s what you’ll need to know …

First:  the cost of the home;  the expected interest rate;  the term of the mortgage (i.e., how many years?);  and your down payment.  This will show you the total monthly payment on the principal and interest.  But you’re not finished yet!

Next, add in the annual property taxes and annual insurance costs.  Using all the above criteria the calculator will tell you what your gross monthly income needs to be in order to qualify for a loan on your dream home.

3.  Should I Rent or Buy?

Remember the days when we were told that buying a home is ALWAYS a good investment?  Emotionally that’s probably true.  But it’s not always the case mathematically.  Sometimes you’re better off renting, especially in uncertain times.

Here’s how to know …

First, understand you’re going to be using your “best guess” estimates.  But with a little research you should be able to come pretty close (most of the research simply involves presenting a couple of questions to a knowledgeable realtor or property manager).  Here are the questions on the home ownership side of the equation:

What annual maintenance costs are typical for a home like this?  What’s the annual appreciation %  I could expect on this property?  What % selling costs should I expect?  What are the annual taxes and insurance?  What is the PMI (private mortgage insurance).

Your rental questions are much simpler.  First, – how many years do you plan on being in the home before selling?  Second, how much is the monthly rental payment?  And third, what is the annual rate increase % expected to rent this home?  Now you’re ready.

Using all the factors above a mortgage calculator will tell you — 1.  The total of the payments you’d make buying vs renting, 2.  the total you’d save on rent, and,  3. the total home purchase benefits.  This will help you make an objective decision based solely upon the financial implications.

Other Uses

Other ways you can use a mortgage calculator include finding answers to the following:  What would the monthly payment be?  What is the mortgage principal?  What if I pay extra each month?  Should I pay points to lower my interest rate?  Which loan is better between two or more offers?  What difference would a bi-weekly mortgage vs. a standard mortgage make?

As you may imagine we haven’t even “scratched the surface” of the many benefits of using a mortgage calculator.  They can pay off handsomely.

Virgil Stanphill has been involved in different forms of Business or Ministry for most of the last 25+ years. He currently divides his time between both, helping people overcome challenges they face in the workplace and in day-to-day life – currently, working to help people stay in their homes during these tough economic times.

His business background includes marketing, direct sales, and freelance copywriting, requiring broad research and application in various fields.

His ministry includes writing, teaching, and public speaking.

February 13, 2018

February 8, 2018

Advantages and Disadvantages of a Fixed-rate Mortgage

Filed under: Mortgage — Tags: , , , , , , , — admin @ 12:46 pm


It is a decision that is almost as important as which house you purchase – which type of mortgage to get. Choosing the right mortgage for your specific needs can potentially save you thousands of dollars over the term of the mortgage. Your two basic options when it comes to a mortgage will be a fixed rate (FRM) or an adjustable (ARM) mortgage, although you may also be able to qualify for other options such as an FHA loan or a VA loan.

Most home buyers take out a fixed rate mortgage – around 70% of all mortgages are fixed rate as opposed to adjustable. A fixed rate mortgage is exactly what it sounds like: the interest rate on your loan will not change, regardless of the economy or whether interest rates rise or fall. The terms and conditions of a fixed rate mortgage are also protected by law. An adjustable rate mortgage will go up or down depending on the interest rate at the time. Whether you should choose a fixed rate or adjustable mortgage depends on the general state of the economy along with your financial situation and the risk you are willing to take.

If interest rates are low when you take out a mortgage, or if you just do not want to take the risk of them increasing, you are probably better off with a fixed rate mortgage. If you have a large mortgage, whereby even a slight rate increase may mean a big increase in your monthly mortgage payment – you are perhaps better off with a fixed rate. If you are simply the cautious type who does not like taking a risk, a fixed rate mortgage is typically the best option for you.

The obvious advantage is that the interest rate does not change – and neither will the amount of your monthly payment. You always know exactly how much you will be paying each week and can thus budget more accurately; the amount of your monthly payment will only increase if the amount of insurance rates or the amount of property taxes increases. Some borrowers consider it easier to plan for other big expenses, such as college funds and retirement, with a fixed rate mortgage.

A fixed rate mortgage does not take into account the cost of living or inflation. In other words, as time goes by and you are perhaps earning more money and everything else costs that much more – your mortgage payment is going to stay the same. Arguably, this can mean more money in your pocket – in 20 years from now, you may be earning more money than you are now, but your monthly house payments are going to stay the same.

The biggest disadvantage of a fixed rate mortgage is that you run the risk of missing lower payments when the interest rate goes down. The difference in the amount that you pay each month can be substantial if you have an adjustable rate mortgage and the interest rate is lowered. This not only saves you money each month, but also potentially helps you pay off your mortgage sooner. Of course, nobody can ever accurately predict when interest rates are going to drop, although it is sometimes possible to have some indication and base your decision upon that.

A change in the interest rate can make a huge difference in determining the amount that you end up paying for your home. A homeowner with a 30-year mortgage can enjoy average savings of around $50,000 over the term of their mortgage with the interest rate being lowered by just one point. And an increase in the interest rate of just one or two percent can mean monthly payments that are between $50 and $250 higher, depending on the cost of your home. The decision to take a fixed rate or adjustable mortgage may also depend on whether you are taking out a 15 or 30-year mortgage.

One compromise of sorts is to take out a fixed rate mortgage and then refinance your loan when interest rates are lowered. Another option with a fixed rate mortgage (or an adjustable rate mortgage) is to pay extra each month towards the principal, thus saving a large amount in interest charges – as well as making the term of the mortgage shorter and owning your home sooner. Make sure that any extra amount that you pay is going towards the principal and not the interest.

It is a huge decision – whether to play it safe and take the fixed rate, or take a chance and go with the adjustable rate mortgage. Ultimately, the decision is yours; but be sure to get some good financial advice before deciding. A fixed rate mortgage has many advantages and disadvantages; you just have to decide which is best for your financial situation.

Mike Cole is a freelance writer who writes about economic issues and financial products pertaining to the mortgage industry such a fixed rate mortgage as well as thelowest mortgage rates.

February 4, 2018

Claiming Your Moving Expenses on Your Tax Return

Filed under: Tax — Tags: , , , , — admin @ 12:47 am


If you’re renting an apartment, you probably know that a portion of your apartment rent can be deducted from your taxes. However, you might not know that you can also deduct certain moving expenses from your next tax return, including transportation, packing and storage costs.

You Can Deduct Moving Expenses If …

To be able to claim moving expenses from your taxes, your move has to fit in one of the following categories:

·        You moved to your new home or new apartment to start a job or a business, or to attend full-time post-secondary courses at a university, college or other educational institution.

·        Your new place of residence is at least 40 kilometres closer to your workplace or school than your previous home.

·        You moved from one place in Canada to another place in Canada.

Eligible Moving Expenses:

The Canada Revenue Agency allows you to deduct reasonable amounts that you paid for moving yourself, your family and your household effects, including:

·        Transportation costs associated with moving from your old residence to your new one (e.g., gas, meals, and accommodation).

·        Transportation and storage costs for your household effects (e.g., packing, hauling, storage and insurance).

·        The cost of revising your legal documents and driver’s license to reflect the address change,

·        The costs associated with disconnecting and switching over your utility hookups (e.g., cable, Internet, phone, hydro and gas).

·        A maximum of 15 days’ living expenses near new or old residence (e.g., hotels and meals).

·        The cost of cancelling your old lease.

·        The cost of selling your old residence (including advertising, notary or legal fees, real estate commissions and mortgage penalties).

·        If applicable, the costs associated with maintaining heat and power in a vacant old residence.

Expenses That Are Not Deductible:

Although the list above covers many of the costs associated with moving to a new apartment, there are many expenses that are not deductible (including some that are similar in nature to those that can be claimed). These include:

·        A loss on the sale of your previous home.

·        Expenses for work done to make your previous home more saleable.

·        Transportation expenses for house-hunting trips before your move.

·        Mail-forwarding costs.

·        Expenses to replace items such as drapes, carpets and toolsheds.

Be sure to keep all of your receipts and documents supporting your claims – even if it’s not necessary to send them with your tax return, the CRA may want to see them at a later date.

Please keep in mind that the information presented in this article is very general and is subject to change, as tax laws are modified on a frequent basis. For specific details about which moving expenses you can claim, the maximum amount you can claim and the forms you will need to make your claim, be sure to check out the Canada Revenue Agency’s website or meet with a professional accountant.

Looking for an apartment for rent in Ottawa? Paramount Properties is Ottawa’s second largest residential property management company. With more than 4,500 Ottawa apartment rentals available in some of the city’s finest locations, we’re your #1 choice for an Ottawa apartment.

January 25, 2018

How a Fixed Rate Mortgage Can be Beneficial When Buying a Home

Filed under: Mortgage — Tags: , , , , , , , , , — admin @ 12:47 pm


If you are just about to buy a house, one of your most important decisions, almost as important as which home you buy, is what type of mortgage to take out. You basically have two choices; a fixed rate mortgage (FRM) or an adjustable rate mortgage (ARM) Choosing a mortgage that best fits your specific needs can potentially either save or cost you a great deal of money over the term of the mortgage. Around 70% of homebuyers today choose a fixed rate mortgage, rather than an adjustable rate mortgage. A fixed rate mortgage is exactly what it sounds like. The interest rate on the loan doesn’t change, regardless of whether interest rates in general go up or down. An adjustable rate mortgage may go up or down, depending on the interest rate at the time. Your decision may be influenced by your overall financial situation, the present state of the economy and the cost of your house.The overall amount that you end up paying for your home can be greatly influenced by even a small change in the interest rate. A lowering of the interest rate by just one point can mean that a homeowner with a 30 year mortgage can enjoy average savings of around $50,000 over the term of their mortgage. An increase in the interest rate of just one or two percent can mean monthly payments that are between $50 and $250 higher, depending on how much you paid for your home. Whether you are taking out a 15 or 30 year mortgage may also influence your decision to take out an adjustable rate or fixed rate mortgage.The biggest benefit of a fixed rate mortgage is the peace of mind that comes with knowing that regardless of how bad the economy is the rate on your mortgage loan won’t increase; neither will your monthly payment amounts. In fact, the terms and conditions of a fixed rate mortgage are protected by law. A fixed rate mortgage is an ideal option for those buyers who just don’t want to take a risk, or consider themselves the cautious type when it comes to finances.Another benefit of a fixed rate mortgage is that it makes it easier for the homeowner to budget the expense. Your mortgage payment is probably your single biggest expense and you always know exactly how much the monthly payment will be. Some buyers believe that this makes it a little bit easier to plan and budget for some of life’s other big expenses. Certain things like college funds and retirement for example. With a fixed rate mortgage, the amount of the monthly payment will only increase if there is an increase in the amount of insurance rates or property taxes.A fixed rate mortgage is not affected by inflation or the cost of living. Supposing you have a monthly mortgage payment of $700; this amount will still be the same after five, ten, and twenty years have gone by. Even though everything else has increased in cost, your mortgage payment will stay the same. One way to offset this is to consider the possibilities in the future. Chances are you could have a more disposable income as time passes. You could be earning a higher salary, but still paying the same every month for your home. If you prefer the safer option of the fixed rate mortgage, one solution would be to take out a fixed rate mortgage and then refinance your loan if and when interest rates are lowered. This approach keeps your options open. If interest rates go down sufficiently to justify the cost of refinancing, you can do just that; if rates stay where they are or go up you will be glad you have the fixed rate mortgage.  Some financial experts advise that it is only worth refinancing if the interest rate will be at least 2% lower than your current rate, although that decision entirely is up to you.Another strategy that can be applied towards either a fixed rate or adjustable mortgage is to pay an extra amount each month towards the principal. By doing this regularly, you can potentially save a large amount in interest charges. It can also make the term of the mortgage shorter and you may be able to own your home sooner. Make sure that you specify that any extra amount that you pay is going towards the principal and not the interest. By doing this, if you have a fixed rate mortgage and the rate is not as low as it could be, you are getting ahead a little bit.Ultimately the decision of whether to take a fixed rate mortgage or an adjustable rate mortgage is yours. Although several factors may influence your decision, one of the biggest questions to ask yourself is how much of a risk you want to take.

Shawn Thomas is a freelance writer who writes about economic issues and financial products pertaining to the mortgage industry such a fixed rate mortgage as well as the lowest mortgage rates.

January 19, 2018

Spanish Mortgages – An Investors Guide

Filed under: Mortgage — Tags: , , , , — admin @ 12:46 am


For foreigners wishing to buy a property in Spain, there are a variety of different mortgages on offer in the country. Variable rate mortgages, which come with a changing rate of interest, are the most popular form, but fixed-rate mortgages are also available which come with a fixed level of interest.
As well as being provided by Spanish banks, mortgages are also provided by international banks. Mortgage lenders are quite free to establish the terms of the mortgages that they provide, meaning there is a lot of choice on offer in the market. For this reason, borrowers should always shop around considerably before choosing a lender.
The situation for foreigners wanting to get a mortgage is slightly different to that of the local residents. We would advise you that foreigners are unlikely to get as good a deal as residents and, as a rule, foreign buyers will not usually be able to borrow more than about 60% or 70% of the total property value. This is because foreign buyers represent a greater risk to the lenders. Finding a good mortgage broker, therefore, is almost essential in order to find the best deals.
Although we would always recommend that you shop around for the best mortgage deal for you, some new-build properties, which are popular with foreign buyers, will arrange their own arrangements with a particular mortgage lender. In this situation, we would suggest that you find out all that you can about the lenders and the type of mortgage before signing up to anything, as it may not be in your best interests to take out a mortgage with them.
Mortgage Fees
It can often be quite confusing when you first start to look for a mortgage, but if you rush into proceedings and choose the first mortgage that you find then you can end up paying a lot more money in the long term. Mortgages in Spain can be quite expensive in terms of the costs involved in setting them up. As a result, you should always shop around until you find the cheapest one for you.
Before taking out a mortgage, we would inform you that there are a number of fees involved in the process, which can often add up to several thousand euros.
The first major fee comes in the form of the valuation. Every mortgage lender in Spain will require that your chosen property has been valued before they agree to provide you with a mortgage. For that reason, you will have to hire someone to make a valuation of the property, and prices for this will vary. By looking around you should be able to find a valuation service for a few hundred euros, but it is equally possible to fork out much larger sums of money, sometimes over €1,000, for the same job.
On top of this, you will then be required to pay an opening fee upon taking out the mortgage, which is usually 1% of the total mortgage. After this, you will then have to pay a whole host of other fees to complete the process. These include property insurance, which is obligatory for all buyers, a land registry fee, stamp duty and a notary fee, although the prices for these will vary between lenders.
As there are so many mortgage lenders in Spain, all of whom will offer different levels of mortgages, many people find that once they have bought a property they then come across a better mortgage and wish to change. For this reason, mortgage lenders might impose an early cancellation fee on their mortgages, which requires you to pay a certain percentage of the total mortgage if you decide to cancel.
Mortgage Procedures
When you finally get to the stage of taking out a mortgage after finding a suitable lender, one of the first things you will be required to do is to prove your earnings. If you are currently working in the UK for a company then you should take details of your pay slips. If you are self employed, then you should find out what the exact requirements are to prove how much you earn, although it is likely to be evidence of your last three years of earnings.
As mentioned earlier, if you wanted to get a greater percentage of the property value in your mortgage then you would have to be a resident of Spain. However, becoming a resident is not too difficult. In fact, we know that if you are living and working in Spain for over a certain period of time equal to about six months of the year then you will automatically qualify as a resident and will be entitled to between 80% and 100% of the property value. If you are considering trying to get a higher mortgage loan then we would advise you to move to Spain for part of the year first in order to do accomplish this.
After you have taken out your mortgage and paid all the fees, if you fail to make your payments then you will be subject to similar foreclosure procedures as anywhere else. If you default on your payments then we would warn you that you should not think that running away to your home country will provide you with any protection, as Spain has many agreements with other countries that will cover your assets in your home country should foreclosure proceedings begin.

La Costa Property Solutions are one of the Costa del Sol’s longest established property agents and adhere to the Andalucian property law – Decreto 218. They are able to help with all aspects of buying property in the costa del sol. Please visit www.lacostapropertysolutions.com for more information.

December 31, 2017

Which Mortgage is Best for You?

Filed under: Mortgage — Tags: , , , , , , — admin @ 12:47 am


Many homeowners today are searching for a new loan. Most are looking to refinance the interest high loans. Back in 2005 many homeowners purchased their loan with a low entry interest rate, just to qualify for the loan. But, today that same loan has readjusted upward and the monthly payment has in some cases double!

If you’re in this situation then read on. There are many different loans that are available today. Becoming familiar with the different loan options will help you make a better decision.

First think about what it is that your trying to do? For example, if your current loan has adjusted and now your monthly payment has increased to a level where you can no longer keep making the payment. You will need to refinance your current loan. Depending on how long you plan on staying in your home you will probably want a fix rate loan.

Start learning about the different loans:

A fixed rate mortgage is a way to refinance higher adjustable rate mortgages. Two of the most common choices you’ll find in the mortgage market are adjustable rate mortgages and fixed rate mortgages. Fixed rate mortgages are the most common type of house-buying loan, where the payments and interest rates remain the same, no matter what happens.

One reason that immediately comes to mind is the fact that, although the most common 30-year first mortgages have fixed rates, piggyback mortgage have variable interest rates that can zoom up and present an unplanned burden for the borrower. Adjustable rate mortgages usually have an initial fixed rate that is lower than the interest rate of a comparable fixed rate mortgage. Many people commonly use second mortgages for such expenses as home improvements, the purchase of a second or vacation home and to consolidate other debts with a lower interest rate.

A general requirement to qualify for bad credit second mortgages is that the owner should have home equity. Aside from this, bad credit mortgages can help the owner gather wealth. There are a number of advantages when an owner gets bad credit second mortgages.

The companies who specialize in bad credit mortgages are usually trained in how to help people gain a mortgage with those blemishes. If you are interested in a mortgage for people with bad credit then the best thing to do is speak to a professional mortgage broker, who specializes in providing advice for bad credit mortgages. Unfortunately one of the consequences of having bad credit is that lenders are wary about lending money to you, especially when it is for as large an amount as a mortgage.

Principal limit or maximum principal limit is the total aggregate amount of money that will ever be available over the life of the reverse mortgage. A second solution is the Lender-Paid Mortgage Insurance (LPMI) in which the lender, and not the borrower, “pays up front” the cost of the insurance but the total amount is rolled into the mortgage and amortized over the whole life of the loan. Age is a primary consideration because the longer the life expectancy of the youngest borrower, the more servicing fees, mortgage insurance premiums, and interest will be charged to the loan balance over the life of the loan.

Because the principle balance was never reduced, the borrower will owe the Mortgage Company the full amount at the conclusion of the interest only period. Increased cash flow with reduced mortgage payments during the first few years than conventional mortgages, because initially you’re only paying interest. Reverse mortgages are simply loans that enable homeowners 62 or older to borrow against the equity in their homes, without having to sell the home or take on new monthly mortgage payments.

Homeowners who are sixty-two or older can borrow against the equity in their homes under a reverse mortgage program. The Reverse Mortgage Program allows seniors to convert the equity from their homes into retirement income. Stated income home equity lines are available to all borrowers but the mortgage lenders usually require the borrower to have a minimum fico score of 680 or better.

First of all, you need a higher FICO (credit) score to qualify for the piggyback (about 680) than for the first mortgage (as low as 620 will do). Because you are not providing information for the lender to assess risk other than your credit score, the interest rate you qualify for will be higher than a traditional mortgage. Fixed rate, traditional mortgages have the advantage of providing a constant payment amount with an interest rate that will not change because of the Federal Reserve or economic uncertainty when bombs fall in the Middle East.

Discount rate mortgages are a type of variable rate mortgage where there is an introductory period during which an agreed reduction in the usual variable rate is provided. Capped rate is a type of variable mortgage with an introductory period where the upper level to which the interest rate can increase is restricted. In an ARM, the interest rates are fixed only for a certain time period after which they change according to the existing rates in the market and some market index such as Prime Rate, LIBOR, and Treasury Index etc.

Adjustable rate mortgages are a great idea when the interest rates are all set to go down for the next several years. Mortgage rates are already reacting with the rates for fixed rate mortgages rising. The long term, purchase money mortgages made to homeowners, would have smaller returns, just below the rates the banks are charging, because of the relative safety of the loan.

According to several large home equity lenders, the secondary loan volume increases when interest rates climb, because homeowners don’t want to refinance the first mortgage lien. For the latest interest rates for fixed rate mortgages and interest only credit lines, please visit the online resources at BD Second Mortgage & Equity Loans. The point to be pondered is that bad credit mortgages have higher interest rates than most other types of loans.

Clifton Waldrep: has over 25 years of experience in the real estate field. You will be amazed at the diversity of his Real Estate knowledge. From buying and selling real estate, to subjects like FSBO, Foreclosures, Rehabbing, No Money Down, Commercial Real Estate, Real Estate Property Management, Remodeling your home, and much, much more! Check out his web site at http://www.mortgage-refinancing-news.com/

December 28, 2017

Mortgage Advice

Filed under: Mortgage — Tags: , , , — admin @ 12:48 am

Finding independent mortgage advice is not as hard as it sounds. It is very important though if you want to make the right decision about which mortgage is the best one for you.

There are plenty of information about mortgages in the public domain on websites, in magazines and tabulated over and over again in mortgage comparison tables. We believe that because there are so many variables within the minefield that is mortgages, that seeking mortgage advice is essential. In fact, we even recommend you speak to independent mortgage advisors or brokers who have access to the whole UK mortgages market because otherwise you might not get advice covering all mortgages available to you.

This is even more important if you are trying to get onto the first rung of the property ladder and are a first time buyer. With the property market being so tough in the UK, there are more and more first time buyer mortgages on the market now and good mortgage advice for your first home is essential.

Since 2004 the giving of personal financial and mortgage advice in the UK has been governed by the Financial Services Authority. Companies or individuals offering personal financial or mortgage advice must comply with the Financial Services Act or they are breaking the law. Many companies offer consultations on an ‘information only’ basis and you would need to formally agree to having requested to be advised on financial matters. Adherence to the rules of the Financial Services Act is called ‘compliance’.

Mortgage advice can be sought from a number of sources:

• A tied mortgage adviser: These work – and will therefore recommend products – on behalf of just one lender.

• A multi-tied adviser: These will recommend products from a limited range of lenders.

• An Independent Financial Adviser (IFA) or Independent Mortgage Advisor: These will recommend products from the whole market.

You are perfectly entitled to ask on what basis your advisor is operating.

Be warned though, that if you go to see an Independent Mortgage Advisor, they will be independent on mortgages but perhaps not insurance – and most homebuyers take buildings insurance alongside their mortgage.

By researching and reading it is relatively easy to glean a certain amount of useful information but by seeking personal mortgage advice from a mortgage advisor, you will be gaining the expertise of someone who knows all about all the different first time buyer mortgages on the market, what special deals are on offer, the peculiarities of the one lender versus another, what the latest mortgage releases are and of course they will always take your personal plans and circumstances into consideration.

As well as verifying who you are, you will be required to provide evidence of major income (your salary) and your major out-goings like car-loans, student loans etc. If you have loans or debts, it does not mean that you cannot apply for a mortgage.

Mortgage advice can be given in a number of different ways. It can be given by phone, email or in person – different advisors work in different ways. These days professionals are pretty flexible. In order to give you proper mortgage advice, mortgage advisors will need to a great deal of information about your personal finances. They want to determine that you can and will be able to make the mortgage payments. The last thing they want is to repossess your property if you fail to be able to make the mortgage payments. They will ask your permission before they give financial or mortgage advice. You will probably need to sign an agreement form saying that you agree to being given mortgage advices as opposed to just mortgage information.

When the mortgage advisor or mortgage brokers has taken all the information from you about what you want and your finances, you might, after agreeing which mortgage and which mortgage lender is appropriate to you, make a mortgage application.

The selected mortgage lender will scrutinise your form and carry outs some checks of their own

Some advisors gain their income form commission they earn from selling insurance policies and mortgages whilst others charge for giving mortgage advice. You are perfectly entitled to ask about what charges will be applicable in your instance.

Don’t be intimidated by mortgage advisors. Though they have trained for a considerable time to be able to offer mortgage and financial advice, they are human, just like the rest of us.

Erin Ryan is a consultant for Helen Adams MD of First Rung Now.

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