Analysts believe mortgage interest rates will rise next year, but estimates on just how much loan interest rates it will go up by differs
What would the rising mortgage interest rates mean for potential homebuyers?
The wide selection of mortgage products available today coupled with the low interest rate environment means that consumers can enjoy incredible choice, and this choice increases the chances of getting a great value loan.
But will this environment of low interest rates last? And if it does, for how long? Analysts like Fannie Mae predicts that mortgage rates will climb tfor a 30-year fixed rate loan next year.
Mr Paul Ho, chief officer at iCompareLoan, said: “I expect mortgage mortgage interest rates to slowly rise by the end of 2022, but it will still remain lower than HDB’s concessionary interest rates.”
“Singapore’s headline inflation rose to 3.2 per cent in October, the highest in over 8 years. This coupled with an economy that is on the upward trend will put more pressure on mortgage interest rates,” he added.
Mr Ho said, “Where possible, potential homebuyers should make use of the current low rate environment because it means you can get a great value loan, But without the right help, trying to find the best mortgage package for your needs, your circumstances, and your budget can be a difficult and often frustrating task.”
Without getting professional help a potential homebuyer could end up spending hours and hours trawling through the deals from various companies to find the great value loan, and while you are busy trying to interpret the financial jargon that many lenders may throw at you, another buyer could snatch the house of your dreams from under your nose.
The other downside to going it alone when looking for a great value loan is the time that it can take.
With the pace of life as it is today, many of us barely have time to sit down and enjoy a little quality time as it is. Spending hours glued to the computer or ringing around various lenders is something that most of us can well do without. If you go directly from lender to lender to get your mortgage, you will end up having to complete a new application for each lender, which can waste a great deal of time. Additional time will be taken up with browsing and comparing all the different deals with each lender, and then comparing the lenders against one another.
Using a mortgage broker is an effective way of getting that great value loan to suit your needs without having to commit hours of your time to searching and browsing.
When you use a mortgage broker service, you will simply be cutting out all of the time and work involved in finding a mortgage to suit your circumstances — and it won’t cost you a cent to do it. A good mortgage broker service will be able to source a wide range of mortgage deals on your behalf, and will then put forward the ones that offer the best value in terms of interest rates and monthly repayments. All you have to do is complete one simple application form, which saves you the hassle of having to complete a form for each lender in which you are interested.
An established mortgage broker will already have formed links, contacts, and relationships with a wide range of mortgage lenders. He or she will therefore know which lenders may cater for your particular needs. For instance, if you have a poor credit rating and you are looking for an affordable mortgage, the broker will most likely know which lenders offer affordable finance to those with a tarnished credit history and can therefore approach the right lenders straight away. If you were looking for a bad credit mortgage without the help of a broker, you could end up going through one application after another with a range of unsuitable lenders, and you could end up with a long line of refusals, which could make your credit rating even worse.
Using a mortgage broker is a great way to get the best mortgage package – affordable mortgage that is tailored to meet your needs and circumstances. It is also an excellent solution to getting a good mortgage deal without having to put in the hard work and time that you would have to without the assistance of a professional broker.
But you also have to exercise some caution. With more mortgage lenders and brokers entering the market, there is more potential for dishonesty to just close a deal. There are many websites that advertise, “make lenders compete for your business,” but the only problem with this is many of the brokers or lenders do not look properly at your information and send an email giving the basic quote, not a specific quote for your needs. The lenders or brokers that do send a specific quote and give you a monthly payment, after speaking to them over the phone and getting the rates and monthly payment, the quote is no where near the original.
So, how can you find a mortgage broker who is truthful and honest?
Not all websites are bad to use when looking for a mortgage broker, just be aware that some do not mention certain fees, prepayment penalties, or may not add your taxes into their monthly estimated payment.
Before shopping around for a mortgage broker, make a list of the certain terms and personal concerns to ask any lender or broker to choose the honest from the dishonest. Begin the list with the amount of mortgage you are inquiring about, ask about the interest rates, second mortgages, penalty fees, closing cost, application fee, appraisal fee, flexible closing, lock in rate, and fixed or variable rates. From this point, you should have enough information to decide which lender or broker you feel most comfortable with.
The best way to find a mortgage broker who is honest, truthful, and patient is by asking friends, family, and sometimes property agents and developers. The most reliable answers you will get is from people who have used a mortgage brokers services. Buying or refinancing a home can be stressful and confusing, why add to this stress with a broker of lender who is not professional?
There are many large, corporate banks and smaller, financial institutions; whichever you decide to use, asking for referrals and recommendations will usually lend you the best mortgage package that is tailored just for you.