Mortgage Loan Quotes
Getting Mortgage Rates from Lenders and Brokers
A mortgage loan is probably one of the biggest debts that you are likely to take on in your lifetime. That is why obtaining a mortgage loan quote is essential before taking the plunge and applying for the loan itself. By requesting a quotation, you will be able to see if you will actually be able to afford the property in question. There are hundreds, even thousands of mortgage lenders, each offering different loan programs with various different interest rates. The interest rate is the charge that the mortgage company applies to the amount borrowed for lending the funds to you. You may find that it is worth your while shopping around for a mortgage in order to find the best interest rates. Many homebuyers find it useful to request quotes from several different mortgage lenders so that they can compare their rates.
Mortgage loan quotes can be requested either direct from lenders or from mortgage brokers. The direct lenders are the companies that will actually be providing the funds and making the final decision on your application. A mortgage broker is basically the "go between" and can obtain quotes from a selection of lenders on your behalf. These people are particularly useful if you have special finance requirements and are finding it difficult to source an appropriate lender.
What details will be required for the quotation? Once you have supplied your name and date of birth, the main information needed to produce the quote includes details such as the required mortgage amount, the loan term and the relevant interest rate.
The mortgage amount is the sum of money required to purchase the property. This is usually the purchase price of the property minus the down payment. Some companies do provide 100 percent mortgages, however, most will request a down payment as this reduces the amount of risk to the lender.
The term is the number of years over which the loan is to be repaid. The number of years should be flexible but most borrowers tend to opt for one of between 15 and 30 years. The interest rate, as mentioned before, is what the company charges for lending the funds. Interest rates tend to fluctuate in line with Wall Street securities.
Once all this information has been established, a mortgage calculator will calculate a monthly payment. This is the amount of money you are expected to pay each month in order to pay back the loan, and will consist of principle (the original loan) and interest (the amount you are being charged on the loan). The quote will also show the total amount paid at the end of the term. As you can imagine, this amount will be much higher than the principal loan borrowed in the beginning.