Eligibility criteria for low fixed rate mortgage deals
A low rate fixed mortgage is a home mortgage loan where the interest rate remains fixed throughout the fixed term of the mortgage. The interest then changes to another fixed rate for the remaining term of the loan. Here are the eligibility criteria for such mortgage deals in UK:
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Who should take a fixed mortgage loan?
Mortgages which are fixed are very popular in the USA, where the mortgages' deals can be extended even up to 40 years. Different companies offer different rates and fixed terms, and financing of the property ranges between 65% and 90%. The interest rate on fixed rate mortgages is higher than the interest rate on adjustable or tracker rate mortgages. A fixed mortgage is ideal for those taking their first home loan, those who want stability in their repayments and for those who do not like any interest rate fluctuations to impact their loan and their home cost. The fixed amount which is payable every month helps in long-term financial planning and the fixed rate eliminates risk. Moreover, when a borrower qualify for low cost mortgages, they can shorten the repayment period thereby shortening his liability time.
Eligibility criteria for a low rate fixed mortgage loan
The low fixed rate mortgage must be comfortably affordable. This is the principal factor which helps to determine eligibility. If the lender feels that this repayment will cause distress to the borrower, they will not sanction the loan, or will sanction a higher rate loan if the distress factor seems medium-to-high. Every lender’s finance department professionals can easily figure out a borrower’s affordability quotient by taking into account factors like living expenses, insurance and taxes. The fixed rate mortgage repayments must be sustained by the borrower. These mortgages run for a long time and if the borrower’s sustainability is questioned (example: if the borrower has a small business which is just making enough money, and does not have adequate assets), then the lender will reject his best mortgage loan. The credit score is very important. No borrower can expect to get buy mortgages with low rated if his credit score is par or slightly over par. A high credit score will help. Lenders always look out for more business. Many lenders will require the borrowers to run a current account in their institution to be eligible for fixed mortgages which have the best rates. The lender may require the borrower’s salary to be mandated for a minimum period to qualify. Example: the lending institutions will require the borrower to ensure that his salary is deposited in his account with them for at least three months. If the borrower can put down a higher deposit (20% and over), it will increase his chances of getting a low rate mortgage.