You have been looking for some time, and dreaming about getting a lot and building a great house for you and the family. Well, you've found the lot and are now looking for the right financing for it. Getting the right lot loan for your new investment in life can be had if you will look around for it, and not move too quickly. Here are some tips to help you get that perfect lot loan.
Know What You Are Looking For
In order to know a good deal when you see one, you are going to have to know a little about lot loans, and their terms. This means doing some old-fashioned homework. Now there is a word that you need to get used to - again. It will prove to be well worth it after you have landed the good deal and sifted out the bad - and saved yourself thousands of dollars.
Have An Investment Ready
Although lenders can be found that will give you a loan for up to about 90% of the price, you will get a better deal and interest rate if you can pay for at least 20% of the loan to value (LTV), but you do not want to pay more than 35%. Beyond these two extremes, you probably won't get a loan.
Establish A Date To Build Your House
Most lenders do not want to talk to you about a lot loan unless you have a date to build your house within 5 years of buying the land. By having a concrete date set, you will be more likely to have your lot loan approved. By talking to them about being able to convert the loan to a construction loan and then to a first mortgage, you will find many that would be glad to talk to you. Going this route can save you some money, too.
Determine The Best Kind of Loan
Knowing the difference between a fixed rate mortgage and an adjustable rate mortgage could mean a difference in savings of thousands of dollars. Although both have a fixed rate of interest for a while, one will definitely do better than the other - depending on which way the economy is going.
Get Online Estimates
Most mortgage companies, and other lenders or brokers, have websites and give you access to getting your free online mortgage estimates. By typing in some basic information, some websites will give you results from many different mortgage lenders. Remember, though, that online estimates are only that - estimates. In order to correctly calculate what a mortgage would be, a company must review your credit rating and physically do an appraisal of the property.
Break Down The Estimates
Try to break down the estimates you received into the base loan and the fees. Then compare each of these among the same type of loan, whether a fixed rate or an adjustable mortgage.
Negotiate
After you believe that you have found one or two companies that look good to you, you can check them out on the Internet and make sure that they are good companies. Then, talk to them and see if you can negotiate an even better deal than what was originally offered. A little hint - the fees are what you want to work on.
Finally, watch out for ERC's, or Early Redemption Charges. These things will prevent real savings if you should decide to pay off the mortgage early. In other words there is a fee for it. Throw it into the negotiation process too, and if they won't remove it - others are available.
If you are getting ready to rent a property it is essential you follow some simple recommendations to get the right tenants for your property to let. Decent tenants can sometimes be hard to find. You need people that will pay on time. It is possible that you need their rent to cover your own house payments, but either way, chasing back rent through the courts can be a costly and time consuming business. These tenants also need to be of reasonable character to ensure your property to let is looked after and to protect your investment. Tenants that do not take care of your property may end up costing you more than they are worth. You must make sure you interview each tenant. A set of reasonable, well thought out, questions and a face to face interview will go a long way towards you getting your flat or house rented to the right people. References are another big issue. They have to be checked. This can be time consuming but it is vital if you want a trustworthy tenant. Make sure the references are legitimate and most importantly that they are from previous landlords and not just close friends of your prospective clients. You need to know that these people will look after your property to let, not just that they make excellent friends. People who have never rented before may be able to provide you with a statement from an employer. Either way, do not take references on face value they are too easily forged, make sure you phone the number provided. Always run a credit check. These are a great way to make sure your tenant has a history of paying their rent on time. You do not want to end up in court. Even if you are right, court proceedings can get messy. You need to make sure when you interview the prospective tenant for the first time that you have a form handy for them to fill in giving you permission to run a credit check on them. Evidence of the odd late payment may not be a problem but a consistent failure to pay obviously is. Especially if that failure to pay involves a history of failure to pay rent on a flat or house. All of this can be a very complicated and time consuming business. You have to ask yourself what is your time worth an hour? Maybe your expertise would be better used somewhere else? One way to ensure decent tenants is to hire a reputable business with experience in the property to let business to take care of this for you. They may save you a lot of worry and heartbreak. They can also save you valuable time, not to mention, most importantly, money. They are, after all, the experts in this field the way you are in yours.
Both Joseph Kenny & Alex Paterson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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