How to Choose the Right Financier for Your First Mortgage

What are the key considerations for a first mortgage? Assuming you have looked at our list of home ownership options and have chosen mortgage as the right one for you. To choose the right financier for your first mortgage, you need to evaluate your current financial position.

Like any other financial product, mortgages can bring joy, pain or both and that is why you need to spend time in studying the market. Take this simple 5 step plan to ensure you choose the right financier for your first mortgage.

Make a budget

A budget should be the first input in any financial consideration. If you are already working with budgets then you know whether you are in a position to take up more financial responsibilities. Remember that apart from the actual deductions, you need to calculate the cost of finance offered by different providers.

Evaluate and compare interest rates

The financial markets rise and fall due to shifts in trade, currency exchange, politics etc. You need to study the current periods to ensure you get a reasonable rate.  Use this chance to negotiate for better rates on other products offered by the same company or associate companies. Ask about their policies on equity loans, refinance, insurance etc.

Seek Customer reviews

Ideally, the process of searching for a mortgage producer should start as soon as you get you first job. This gives you sufficient time to play around with numbers and make a choice based on quantifiable information. Check for reviews online to get a feel of what real clients have gone through. You may also ask family or friends for their preferences – then take this out for a test drive by checking them out yourself.

Get Professional finance advice

In order to figure out how to choose the right financier for your first mortgage, it’s advisable to use the services of a broker or financial advisor. It is a small cost to pay for the kind of advice you get. In some countries such as Australia, there are professional brokers who not only give advice but also connect one with the best rates. Moreover, since they have experience, they would know better how to negotiate on the rates.

Pay attention to detail

A mortgage is simply a long term financing plan – a loan that you have to pay on a regular basis. It is offered at lower rates than regular borrowing because it is secured by the home. It offers low risk to the lender but for you as the buyer, the risk remains. You need to segment your income in such a way that you have enough to live with after paying your responsibilities.

One small factor that many home buyers forget to calculate is the interest repayment. If you are not familiar with terminologies, ask your financial advisor to read the terms and explain what they mean. Many people have gone into bankruptcy because of mortgages, when some things catch them by surprise. Give this your best shot and take your time to choose the right financier for your first mortgage.


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