We all dream of owning that perfect home, but the reality is that dealing with the property market can be a very frustrating affair. The stakes are very high for all concerned – it is likely to be the biggest financial decision you will ever make, and everybody surrounding you as you engage in the process certainly knows it too, be it the estate agent, the lender, lawyers and surveyors. They all want a sizeable cut of your money as they have businesses to run, and it’s difficult for the customer to pick apart who is being honest and trustworthy, and who is simply ripping you off. Unless you work in this profession yourself, you simply won’t know who the best contacts are that can provide a fair deal, and who should be best avoided.
You may be sitting there wondering if a good mortgage company could exist that would understand your moral values and interests, or at the very least if a brand leader mortgage company was known to have some sort of alignment or sympathy to Christian values. Some small companies to exist to fulfil this need, which is pleasing to know, but of course in selecting one for yourself you will need to ensure that you are convinced of their greater motives behind the sincerity. The bottom line is that lenders are there to sell, and they will sweeten everything to be what the customer wants to hear in order to get you on their loan plan, so you always need to be wary and do your full due diligence, no matter how much you trust the mortgage provider.
Quite often, it isn’t simply the case that somebody applies for a mortgage loan with a huge downpayment that they can put on the perfect house they have always wanted. This is everybody’s dream, but in the grand scheme of things, that is very much the exception to the rule. In general the average person who needs a mortgage is not financially prosperous by any means, they will have worked long and hard and fought all sorts of battles to get a deposit together on a humble abode. The house they can afford will not be particularly impressive but their priority is to get a stable roof over the heads of their families and make the first step onto the property ladder. And for many others, they are already homeowners and need to deal with refinancing as they are struggling with the poor economy. In both cases, there needs to be a great deal of sensitivity to the situation from the mortgage broker and lender, and the last thing anybody wants is for the borrower to find themselves more out of pocket five years down the line because they entered into questionable arrangements from unscrupulous fly-by-night advisors.
So what you are going to have to find is a mortgage company that truly understands and empathises where their clients are coming from – indeed, those who have lived through this situation themselves and understand the moral questions as a Christian. The main question you need to keep in your mind in any property discussion, and this is by no means exclusive to mortgages, is whether the person on the other side of the table is hungry for a fast juicy commission, or if they want a loyal customer to work with in the long term. Hard sells and poorly thought out reasoning for your financial requirements should make you on your guard. The most important factors you need to focus on are not the here and now, but where you are going to be five, ten, twenty-five years down the line when you very may well still be paying off the mortgage, or may have had to carry out considerable upgrade work to the property. Working with a company that will safeguard your future is the priority, as in these times nobody on this Earth knows how fortunes will turn for you as an individual and the economic world at large. The ideal company lays out all the risks and engages in transparency rather than brush the future off, as the years truly fly by once you reach an age!
How does a mortgage company work?
You know when you working with a mortgage company of Christian, or parallel, moral ethics, when a more personal approach and understanding is taken. Far too often when making an application for a mortgage loan, the following will happen: the mortgage company will take your introductory fee and then feed your application into their computer system which will robotically query various other connected computer systems, and from these deduce whether or not you are a worthy candidate for one of their loans. You don’t even need a human to be involved in this process – everything is done via mathematical algorithm, as these are things that a computer can well work out eg. is your credit within a defined threshold, what is your mortgage payment history, what do you earn, and how your property measures up against the norms for your area. The final result is inelegantly spat out and then the sales guy does his bit to justify whatever the robot brain came up with, either selling you on to a particular mortgage plan, or telling you that your business is not required.
Is this really how it should be done? It is great that information technology allows us to do what was effective half a day’s work in a matter of minutes, but from where I’m standing it completely sidesteps the question of why a person’s credit history and circumstances are how they are. For one of the most important transactions in a person’s life, it must be mandatory for an honest conversation takes place about the unique factors that contributed to one’s financial situation today, instead of a computer being the arbiter as to whether you are responsible or equipped enough to pay a mortgage in the long run.
One classic example is around world economic recessions. Can you really be blamed for being in economic hardship at a time when everybody was struggling? Is it truly your fault that financial institutions had daft schemes to gain customers for fast cash that inevitably collapsed? Are you accountable for the fact that the banks had sloppy regulations around what happened on their trading floors, with high risk strategies that failed and had them crying for handouts and a second chance? Of course you’re not, but try telling that to Mr Computer and he just won’t understand! And can a computer really do a proper appraisal of homes similar to yours in your area? They are good at crunching numbers, but without knowing the circumstances behind each sale, the numbers and conclusions are virtually meaningless.
With an engaged, intelligent and morally astute human at the helm of the process, they can look at your ups and downs, and evaluate how you have made good of the bad. Yes, the world has been plumbed into recession, but you’re still around to tell the tale, you still did your best to pay your bills, and indeed the fact that you got through it all in one piece should testify to any savvy mortgage lender that you are in fact the sort of person they need to have on their books – one who is conscientious, hard working and thoughtful in all that they do. And also with a personally focused lender, they will have the right connections and ways to get fast answers for you, and undertake to process your application and loan in the fastest time possible, rather than have things sit around for weeks because your case is sitting in an automated ticketing queue. Plus, even if plans fall through and your credit is not currently good enough, a Christian company is not simply going to drop you like a hot potato. They will look into how to make good of this situation for you, engage in sincere discussion about how to proceed so that one day the dream of owning a home will be finally achievable. Remember, this is a competitive market and people will want to help you – you just need to be in with good and honest people!
A further long-term issue that you may find when going to one of the big brand mortgage lenders is account management. You may get along great with the person who sealed the deal based on mutual trust and understandings, but in a year or two’s time it is very likely they will have moved on somewhere else, and you have to start building the relationship all over again with somebody who may not have any sort of compatible understanding of your situation and way of working. Whereas if you find a smaller company in the Christian sphere, it is far more likely that the moral ethics are pervasive throughout the company’s procedures and that employees are likely to be in it for the long term rather than the promise of a slightly greater paycheck elsewhere.
Anybody new to the world of property is going to be apprehensive about applying in the first place, after all rejection stings as seeing your friends and associates merrily moving ahead in their lives in their cosy new homes, whilst your money slips down the black hole of rent month after month. A lot of your financial past and present is put under scrutiny, as a mortgage is a considerable financial undertaking, but this doesn’t mean that it’s necessarily out of everybody’s reach. There are a lot of plans out there to help first time buyers, and with the right mortgage lender on your side and advice taken on board, young families who never thought they had a chance of obtaining a mortgage can find themselves on the receiving end of a pleasant surprise.
Refinancing the Christian way
Once you have sorted out the mortgage, moved in and dealt with any initial teething troubles with your new property, it’s not the end of your dealings with the financial companies. Indeed a mortgage may need some tweaking further down the line, perhaps considerably so, and the concept of refinancing is a way of allowing changes to your payment plan. Also buying a home is an investment eg. you are buying an asset that will (hopefully) appreciate greatly in value in years to come. In perspective of all the things it is possible to invest in, property is one of the most consistent and safest performers, not that any sort of investment exists that is risk free, and as such you must do what you can to keep hold of this investment.
Why would you want to engage in refinancing your home? Quite a common reason is that times may be hard and you want to find a way of lowering your payments to spread out the loan in an easier way. Or maybe your property has seen a substantial increase in value over the years and you might find a good use for some of that equity. There are even some who have found themselves in improved financial circumstances and simply want to speed up the mortgage repayment process so that they can ultimately eliminate this living expense for good. Mortgage lenders will have schemes for helping customers change their payments, so that the customer keeps their home but also they keep their customer, in other words everybody wins.
Refinancing is a great help to many, but do expect to have to fulfil your part of the bargain as well. It is pleasing to hear, with a hint of suppressed envy, when an acquaintance has gone up the world and is now able to quickly pay off their mortgage, but what they might not tell you is that they had to pay a considerable fee on top of this to effectively compensate the lender for the missed interest they would have enjoyed in future years. Whilst the mortgage companies do what they can to cooperate, likewise they have a business model to follow! It goes the other way too, as those who want to decrease their monthly payments will now have them evened out over a longer period of time, and more time of course means more interest. By the time you have paid off the mortgage, that could mean thousands extra spent, so the message in this case is not to look at refinancing as a one-stop solution to all your problems, despite the short-term attraction in lowering your monthly mortgage payments. Have a look at what else is going on with your finances and try and make meddling with your mortgage a last resort rather than the quick fix. Refinancing programs can come at a cost as well, so if you are planning on inevitably moving house anyway, your long term financial position may have been unchanged anyway.
If you are a longer term home owner and some value has been added to your property, you may be able to work something using the resultant equity. The usual deal is that you can ease on your payment plan or bargain for a lower rate of interest; however your house is the bargaining chip in this exchange, which essentially means that if you don’t pay back on time, your property will be at risk. It sounds severe but usually these loans work out to the advantage of both parties since the stakes are so high, and the money released to the homeowner can be used for starting a business, investing in more property, or simply giving the kids a good start in life, rather than the value sitting there unused in the walls of the home.
Getting Help Online
If you are new to the world of mortgaging and find yourself jumping in at the deep end, you will find a gamut of confusing and rather important sounding terminology. It’s not the most exciting bedtime reading, but I would recommend sitting down and getting to grips with how everything works and the sort of jargon involved. When you get perspective of how things work at the mortgage lender’s end and how they aim to profit from the situation, this should ultimately strike an affinity with what your aims are and how you can effectively help each other.
Also before approaching a lender, it would be advised to try a mock self-assessment of your financial situation so that you don’t get any nasty surprises and can represent yourself correctly. Luckily we are in an age where you don’t need to fiddle with a calculator and some formulae scribbled on the back of an envelope, or consult the encyclopedia for a definition of APR. These days all the sums can be done on an appraisal website, and you can even get a heads-up on your credit rating too, so you know what level you can safely approach under in terms of deposit, monthly repayments and what looks like an agreeable band of interest. There are a selection of mortgage and refinancing calculators on this website to help give you a steer.
As with anything, it’s up to you to carry out full due diligence on any company you approach, or indeed who approaches you. Rushing into a poor deal on a home with a lender who springs all sorts of unnecessary fees and legal trickery on you will only end in stress and upset for you, and the misfortunes will start to funnel into your work and home life too. Whilst there are all sorts of people in the property industry, especially the estate agents, who you want you to make rapid and hurried decisions for the sake of their own commissions, it is always safer to take a breath and find a reputable company with grounded morals who can help you to secure a bright future for your home and family.