More products in the mortgage market make it more difficult to compare different loans. How to choose the best mortgage loan offer.
In recent years, competition in the mortgage market has increased slightly. Bank announced that they would not raise the contribution rates, as the others did so – at least not immediately.
Since then, there have been some initiatives to start new companies / associations based on the original mortgage association idea. It seems to have made the industry wake up a little. The development has shown that there are limits to what the customers will find themselves in.
This has led to a war on mortgage products. An essential part of the strategy seems to be: Offer products that fit exactly to specific customers.
If you are considering converting loans at the moment, and it may well be relevant, it is important to choose the right one to get the best results. The first thing to do is to choose the interest type, installment profile and maturity. See my guide to choosing the right mortgage loan here:
How to compare mortgage offers
Once you have chosen the mortgage loan that suits you, you must obtain loan offers from at least 3 mortgage companies. Start with the company you are using today and use that offer to evaluate the other offers you receive.
The cost of the conversion may vary from company to company. Also, be aware that you can often negotiate these costs both in a mortgage company and in a bank if you are offered several places from.
The cost of conversion is a minor part of the total cost, but if you reduce it, it will lower your annual percentage rate of charge (APR). YEAR is the effective interest rate on the loan and that is your most important benchmark.
YEAR makes it possible to compare the cost of all your loan offers with a single figure. The loan with the lowest APR is most likely the cheapest in the long term.
When you can not be quite sure, it is because the mortgage company can raise the contribution rate if it has a good reason. It may also be that you settle the loan before time, sell the house or something completely third, and then your APR becomes completely different.
2. Property assessment
Every mortgage company makes its own assessment of your property, and since they can be quite different, it means you can borrow more in some companies than in others. If you can pay other debts eg bank debt in connection with the conversion, you must count it with when you compare offers.
3. Comparison of different loans
Since the products in the mortgage companies can be very different, you may have to compare loans with different risks and then the APR is not an optimal basis.
In that case, you should choose the right risk before looking at the APR. If you can significantly reduce the risk with a small increase in APR, it is usually preferable.
Find the right mortgage loan
When converting or taking out mortgage loans, do not skip where the fence is lowest, and take the first and the best offer. Take the time to find the right loan for you, it gives you the best loan and the lowest cost.
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