Before you begin the search to find your dream home there is one important decision you need to make first. The decision you need to make is whether to go for a fixed rate or variable rate mortgage. Both have their benefits but in this article we are going to be taking a close look at those offered to you when you take a loan that has a variable mortgage rate.
Benefit 1 – There are many different lenders who offer this form of mortgage to their customers and so being able to find one that meets your needs shouldn’t prove at all difficult.
However it is still advisable to spend sometime doing a little comparison shopping before you then apply for any given one. Of course you could ask a broker to carry out this work for you but if you want to save yourself money it is far easier to do this research yourself. There are plenty of places to be found on the internet that will list all the different variable rate mortgages together.
Benefit 2 – As these types of loans offer very little risk to the lender because should the rate of interest change then they can alter the loans to reflect this. In some cases as a result you may find that some lenders offering a variable mortgage rate will do so at much less than say with their fixed rate ones.
Benefit 3 – There are now a number of companies who are able to offer a variable mortgage rate to those who credit history is poor. But you need to be aware of course that these tend to be somewhat higher than for those whose credit history is good. The reason the rate will be slightly higher than normal variable rate mortgages as the lender sees you as a much bigger risk. So if you want to get the best rates possible and your credit history is poor it is worth spending some time working on ways to improve it. The first thing you can do is arrange to get any bills that are outstanding paid off and then make sure that you make all future payments in relation any bills or loans you have on time.
By Nicole Davidson