What Can A Mortgage Brokers Do For You

By Doherty • February 22nd, 2011
Subprime Crisis No Barrier to Affordable Housing

Image by woodleywonderworks via Flickr

The fall in real estate market had its repercussions throughout the economy but it has also given an opportunity to cling on. With mortgage rates coming down, today many people are able to realize their dreams of owning a house. This has helped many to fulfill their dreams of owning a house. This gives rise to the questions on what mortgage choices are available in the market today.

The conventional idea is to consult a bank, but today you get a better choice called mortgage brokers for consultation and getting mortgage. There are various mortgage plans available with mortgage brokers which cannot be seen in a bank. It is easy to locate mortgage brokers in your city with a quick search in the net. Rates with mortgage brokers are at times lower than that of the banks.

The first step in taking a mortgage includes ascertaining your income and credit rating via tax and bank statements. They also calculate your GDS (Gross Debt Ratio) and TDS (Total Debt Ratio) ratios. If your GDS is rated to be higher than 32% of your gross income you will find it difficult to get a mortgage.

One important criterion with the vast number of mortgage choices available is time. Mortgage can vary from 15 to 30 years. Even the down payment can see a variation depending on the total length of time taken.

Interest rates for mortgage are another important factor. The two types of rates include the Adjustable Rate Mortgages (ARM) and fixed rates. ARMs are mortgages whose rates adjust according to the terms of the contract. Since ARM carry an inherent risk of market fluctuation, their initial rates are much lower. In fixed rates the interest payment remains unchanged throughout the loan period. If you are taking a mortgage spread over a long period, it is wiser to go for a fixed rate interest.

The vast selection of mortgage choices also includes balloon mortgages which provide mortgage at comparatively low rates and remain unchanged for a particular period. According to this mortgage the interest rate is considerably lower as the duration is only for a short time after which you will have to repay the entire loan amount. In case you need a short term loan and are not looking for a permanent ownership of your house, go for it.

As is evident, today loan seekers have a lot of mortgage choices especially in this reign of lower interests, competitive mortgage brokers and availability of houses at economical prices.

Visit this website for more information on mortgage choice

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