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Posted on 29th Sep, 2016

5 Tips To Help Find A Mortgage For A Repossessed House

Can I get a mortgage on a repossessed property? Yes, but it’s not as straightforward you think. If you are planning on buying a repossessed property and looking for mortgage options, here are 5 tips to help you decide:

#1: Shop Around

Even when you are looking for a mortgage on a repossessed house, the same rules apply as any other transaction, i.e. the loan amount is decided by how much you can afford as down payment, your credit rating, etc. Shop around to look for the best deal in terms of interest rates and discounts. The more you can afford as down payment, the better are your chances of negotiating a better deal. And that’s probably why we advice first-time homeowners to start saving for a down payment. Of course, finding a good investor isn’t about chasing the lowest interest rates; too many have hidden charges even while maintaining an enticing interest rate policy.

#2: Read online reviews about lenders, but…

Remember to sift between the genuine ones and fake testimonials. The fakes ones often set up dummy accounts like Kingpin, big daddy, greatguns, etc. And then there are others that seem too good to be true.

#3: Choose the right type of interest rate

Banks allow you to choose between fixed and floating interest rates. The former involves repaying the loan in fixed installments, while in the later, the rate of interest varies with the market. Fixed interest rates do not fluctuate, irrespective of the market conditions, but they’re usually a few percentage points higher than floating interest rates. Floating interest rates are cheaper, but since monthly installments are uneven, it is difficult to plan a monthly budget.

#4: Ask the right questions

Find about processing fees, documentation requirements, hidden charges, fine on payment defaults, etc. There are professional mortgage brokers to advice you on the different factors and the terms of service of different banks. You may seek advice from a friendly realtor, but he isn’t a specialists. Besides, would you trust a dermatologists to seek opinion on heart ailments?

#5: Know your credit score

This is undoubtedly the most important aspect when looking for home loans. There are several online credit rating websites, but for a more accurate prediction, speak to your accountant. He’ll help you deduce your credit score and also help you determine eligibility.

Buying a home is a major investment; naturally, it makes sense to plan ahead and begin on a clean slate. Reduce credit card bills, because they’re quick to burgeon. Also, wait before making major financial commitments before paying on the mortgage.

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