Perth Mortgage brokers can be a valuable asset. Negotiating your first or subsequent mortgage choice? Bad Credit? First mortgage confusion? A mortgage broker can help you come out the other end of the red tape with a best mortgage deal.
Your Mortgage can be both your debt and your asset: a loan taken out against the title of your property is definitely your debt that has to be repaid within a considerable time. On the other hand, it can be your means to secure an Asset.
Our Mortgage Brokers in Perth can provide you with a sound financial advice as to the type of mortgage you should consider for your present need with special focus on payment options that can provide you flexibility.
For your benefit, we include a basic definition of each type of mortgage that may interest you:
Conventional vs. Innovative Type Mortgages
Lenders provide about 75% of the appraised value of the property prior to purchase to most conventional mortgages. Putting a cap on the mortgage amount is only one of the limiting feature of conventional mortgages. Lenders also determine the kind of property they can accept. This puts many borrowers at a disadvantaged position.
In other type of mortgages, we may call “unconventional”, the owner of the property delivers a 25% down payment. The mortgage amount of 75% is absorbed by the lender.
The limiting feature of this type is the down payment requirement. Most borrowers do not have sufficient funds to meet the 25% requirement.
Fixed and Variable Rate Mortgages
Fixed Rate Mortgages have pre-determined interest rate over a period of time. Borrowers are protected against sudden rise in interest rates during the entire duration of the mortgage. When the mortgage has been satisfied and a renewal is considered, the prevailing interest rate is then considered.
Variable Rate Mortgages, on the other hand, have mortgage interest rate that vary. The prevailing market rate serves as basis. Most Mortgage Brokers will recommend this type of mortgage when at the time of mortgage, interest rate fluctuates, however, this is not a common trend.
Second and Third Mortgages are those taken on the same property by the individual, upon whose payment default, allows the lender of the first mortgage to lay claim on the property. Whatever is left goes to the second lender and to the third. The lender
A second mortgage is usually resorted to in times of financial emergencies like a job lay-off, loss of employment or by homeowners who need additional down payment for the property which is the subject of the mortgage. Second Mortgages are often discouraged if alternative remedies are available such as selling the home or a cut on living expenses.