Mortgage experts agree that planning is crucial when it comes to managing a home loan effectively.
Paul Ryan is the founder of Home Loan Hints, a website where borrowers can ask questions and have an opportunity to talk about mortgages.
He is concerned over the number of people who cannot tell you what their interest rate currently is on credit cards or even home loans.
People can easily check that out for themselves. “People ask a lot about costs involved in making additional payments, paying a loan out early and so on. This is after they have taken the loan out. These are things that should be checked out before signing a contract.
Ryan urges all potential home owners to consider a few important things before they start applying for a home loan, and particularly singles out first home buyers. He says young borrowers in particular are quite clueless when it comes to their credit rating.
Until recently, credit has been fairly easy to get therefore people have gotten used to having several credit cards or store finance. However what most don't realise is that every time you apply for credit this is recorded in their credit file.
Ryan also believes that it is savings that are important. Most lenders are now asking for real savings, proved in bank statements, rather than just first home buyer grants and the like, before they are likely to approve home loan finance or provide mortgages.
Borrowers should also look for better deals and not just settle for the mortgage one bank is offering. Looking at different options puts the buyer in a better position.
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