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NJ Commercial Mortgage Loans Clifton NJ Small Business

NJ Commercial Mortgage Loans Clifton NJ Small Business

By Money Mail Published: 13:34, 28 March 2014 | Updated: 13:34, 28 March 2014 View commentsBuying a home is nothing less than a massive financial commitment. More than 8.6million UK households have a mortgage costing an average of £600 per month, according to the Office for National Statistics.We typically pay £3,468 interest a year on our mortgages. For the average 25-year home loan, that’s a whopping £86,700 interest. And that’s only if we have the average mortgage at the average interest rate.Check the rate: We typically pay £3,468 interest a year on our mortgages, for the average 25-year loan, that's £86,700 interest Those who live in the South or have bigger houses are likely to pay more — as are those who can’t get access to cheap deals, such as buyers with smaller deposits.Londoners face average monthly repayments of £925 and pay £142,000 interest over 25 years.Let’s look at this another way. You might not think it matters too much if you pay an extra 1 per cent on your mortgage. But on a £100,000 mortgage over 25 years this could cost you more than £16,000 in extra interest. The higher the interest rates are, the bigger the difference. So how can you pay less interest on your mortgage and get this beast off your back sooner? When choosing a mortgage, it’s vital to work out the overall cost of the loan. Most people choose fixed rates because they provide certainty. But the smorgasbord of deals can be baffling. Some have low interest rates with high arrangement fees, while others combine a higher interest rate with a lower fee. As a general rule, the more you intend to borrow the more vital it is to keep the interest rate low. At the same time, those borrowing less should beware of bigger arrangement fees which can hike the overall cost. The crossover point is often between £150,000 and £200,000. For example, one lender was recently offering a two-year fix at 2.49 per cent with no arrangement fee. This would cost £448 per month for a £100,000 home loan, giving a total cost of £10,752 over two years.Another was offering a lower 1.6 per cent (£405 per month) with a £1,999 fee. Here, the total cost over two years would be £11,719. So, in fact, the higher interest rate actually works out £967 cheaper.But the tables turn once you start borrowing much more. For a £200,000 mortgage, the 1.6 per cent deal works out slightly cheaper, costing £21,415 — including the fee — compared with £21,504 for the no-fee deal.Think of a high arrangement fee as paying interest upfront and suddenly those deals can seem a lot less attractive.A good mortgage adviser will do the sums for you.Check before you buy: A surprising number of people stick with one lender without shopping around by using a broker or the internet You’ve got four balls to juggle to bag a low home-loan rate. These are the size of the deposit you’ve saved; the length of your deal; its type and the lender you choose.A surprising number of people stick with one lender without shopping around by using a broker or the internet. This can be an expensive mistake.Rates have been slowly rising but if you have a decent deposit of 25 per cent or more you should still be able to get a two-year deal for 2.5 per cent or lower with free basic valuation and legal work thrown in. This would cost about £673 a month for a £150,000 25-year repayment loan. With a smaller deposit, expect to  pay more. If you’ve only a 10 per cent deposit, you will have a far smaller selection of lenders to choose from and you may have to pay 4.5 per cent or more. This would be £835 per month on a £150,000, 25-year loan. For a five-year loan you will have to pay more than 3per cent — even with a 40 per cent deposit.And if you can only put down 5 per cent then the rate is likely to be more than 4 per cent (£792 per month) and possibly close to 5 per cent, a whopping £877 per month for a 25-year £150,000 repayment loan.Adviser London & Country Mortgages says that those who need to borrow 95 per cent of the property value could expect to pay at least 5 per cent. This is around 2 per cent more than the cheapest loans and it could cost you more than £10,000 extra over the five-year fixed period.You'll get the best price for your home when you've got the biggest number of potential buyers actively looking to move. Historically, this tends to be in spring, when buyers look to kick off what is usually their biggest task of the year. According to research from property and conveyancing advice website theadvisory.co.uk lighter evenings encourage more viewings and many families seek to move in time for the new school year (as it can take three to four months to complete a move). This makes March, April and May the peak months to sell, it says. The summer school holidays make it harder to sell, especially for families who need to entertain children for months on end - let alone find time to go house-hunting. August, in particular can be a graveyard. The onset of autumn can make it easier, as the return to school and work for millions means renewed interest in buying ahead of Christmas.But once you reach the end of the second week in November, the market tends to freeze over. If you can hold off, wait until March says Gavin Brazg, founder of the advisory.co.uk Longer fixes clearly give you more security. Against this, they are more expensive. However, many experts now consider that it could be worth paying the extra.This is because a two-year fix will finish in 2016 when mortgage rates will probably be rising gently. So fixing for two years will gain you a little in the short term but you could lose more in the longer term. Another thing to consider is fees. By taking two-year fixes you could pay five fees of typically £500 to £2,000 in 10 years. Five-year fixes would involve just two fees.Offset mortgages are a great way to cut the amount of interest you pay. Basically you keep your savings with your lender but, usually, in a separate account.Instead of being paid interest on your savings the money is deducted from your mortgage and you are only charged interest on the difference.It can be particularly useful if a lender will also offset any money sitting in your current account so you benefit from being charged less interest from the day your salary is paid.For instance if you owe £100,000, have £20,000 in a savings account and £2,000 in your current account then you would be charged interest on the £78,000 difference.It’s basically like being paid tax-free interest at your mortgage rate. In these days when it’s hard to get 1 per cent interest on savings accounts, this is a particularly efficient way to use your money. If you borrowed £150,000 for 25 years at a starting rate of 2.79 per cent — and kept £20,000 in your current or savings account then you could pay off your mortgage more than two years early. You’d avoid paying almost £5,600 interest as well.Alternatively you could take the benefit as you go and pay £44 less interest each month but keep your mortgage term the same.Plenty of lenders offer offset including Woolwich, First Direct and Yorkshire Building Society.Parents or grandparents often want to help children buy their first home. But if you can't afford to simply sign a big cheque for £20,000 or £30,000 what can you do?BE A GUARANTORThe traditional option was to become a guarantor. This would allow your children to take a larger loan. But it is fraught with danger. Typically the lender will expect you to put your home as  collateral, So, if your children don't pay their mortgage, the lender can come after you. That's all very well for your own children, but what if they are married or co-habiting? Do you really want to gamble your home on your son or daughter's relationship?OFFER A 'PARENTAL OFFSET'These allow parents or grandparents to use their savings to reduce the amount of interest their children will be charged. Your money stays in your own savings account and your children can't touch it. The catch is that you won't earn any interest. Instead your savings will be set against the amount they have borrowed, so they will pay less interest. Lenders who offer this style of deal include Yorkshire Building Society and Market Harborough BS.PUT DOWN A PARENTAL DEPOSIT This is similar to the offset, but a parent's savings can be used to make up the deposit and reduce the amount of interest charged, thus keeping down your children's repayments. For example, the first-time buyer may have a 5 per cent deposit. The parents could provide a further 20 per cent which is then locked into a savings account in their name, usually for five years, or until a certain amount of equity is built up in the property. But the main thing is that the savings remain the parent's - not the child's. Market Harborough offers this scheme.If you don’t have an offset mortgage then you could instead pay extra on your own mortgage either monthly or by lump sum.By overpaying, you can reduce both the amount of mortgage interest and time spent making repayments.There are some things to get right here, though. First check your mortgage terms to make sure you are allowed to overpay and won’t be charged a penalty — as a rule of thumb, you can repay 10per cent of the outstanding sum each year without a fine.Be especially careful with fixed rate mortgages; some will allow a degree of overpaying, others won’t allow any.Then give your lender written instructions that you want your repayments to remain the same so that you reduce the mortgage term.If you don’t, they may recalculate what you owe and ask you to pay less each month — without reducing your mortgage term at all.Cut out the middle men: Estate agents charge an average of 1.8 per cent of your property price to sell your home Rising property prices and cheap mortgages have encouraged more investors to snap up a buy-to-let property.It’s never been cheaper to be a landlord, with interest rates as low as 2.49 per cent for a two-year fix and falling loan fees.Lenders are falling over themselves to offer buy-to-let loans to first-timers, or those coming back to the market after a long spell away because of the credit crunch. They include Post Office, TSB and specialist lender Paragon.The deposit needed is also shrinking — 25 per cent used to be the minimum but some will offer a deal with equity of 20 per cent.And in another sign of a buoyant market, the average amounts owed by tenants in arrears is at a three-year low.Decent recent deals for first-time landlords with 25 per cent deposits included a two-year fix from the Post Office at 3.29 per cent and Skipton building society at 3.49 per cent.But buy-to-let remains a big risk. Terrible tenants can ruin your property; shock bills for maintenance can hammer finances; and a drop in demand can see your home lie empty. Lenders base the amount they’ll offer you on the rent a house or flat should earn. They will also ideally want you in a full-time job with enough spare income to cover void periods and any interest  rate rises.Buying a home is nothing less than a massive financial commitment. More than 8.6million UK households have a mortgage costing an average of £600 per month, according to the Office for National Statistics.We typically pay £3,468 interest a year on our mortgages. For the average 25-year home loan, that’s a whopping £86,700 interest. And that’s only if we have the average mortgage at the average interest rate.Those who live in the South or have bigger houses are likely to pay more — as are those who can’t get access to cheap deals, such as buyers with  smaller deposits.Londoners face average monthly repayments of £925 and pay £142,000 interest over 25 years.Let’s look at this another way. You might not think it matters too much if you pay an extra 1per cent on your mortgage.But on a £100,000 mortgage over 25 years this could cost you more than £16,000 in extra interest. The higher the interest rates are, the bigger the difference. So how can you pay less interest on your mortgage and get this beast off your back sooner? Estate agents charge an average of 1.8 per cent of your property price to sell your home, consumer group Which? says. This means handing over £4,500 to an agent for help selling your property for £250,000. But do the legwork yourself and you could save a fortune.The key is to reach as many viewers as possible online.Big property websites such as Rightmove are geared towards estate agents, and private sellers are unable to advertise there. However, plenty of websites let you advertise your property in return for a one-off or monthly fee.For example, noestateagentsplease.co.uk usually charges a one-off fee of £49.98. It lets you create your own listing with more than a  dozen photos. However, you’ll need to rely on buyers knowing about the site. Pick this route and you’ll also need to measure and provide details of the number and size of rooms, prepare an energy performance certificate yourself, arrange your own viewings, and make sure you or a partner can show prospective buyers around.You’ll also have to negotiate with buyers yourself so get a thick skin, brush up on local market knowledge and be prepared to haggle. Alternatively, you can pay an online estate agent a fraction of the charge demanded by a high street chain. It can provide most of the same services: arranging viewings, taking pictures, creating floor plans and dealing with buyers. For example, housesimple.co.uk charges from £395 for a full estate agent service, which includes valuations, viewings and listings on Rightmove and Zoopla.One of the key mistakes first-time buyers make is to underestimate the overall cost of buying. It’s not just a case of saving a deposit and making sure you can afford the monthly mortgage repayments. Research by Government-sponsored consumer advice website Money Advice Service suggests that first-time buyers typically underestimate costs by almost £1,300. Typical costs to budget for include: This is charged at 1 per cent on the sale price of all homes over £125,000. From there the rates are 3 per cent on homes over £250,000, 4per cent over £500,000, 5 per cent over £1million and 7 per cent over £2 million. The tax is charged at a flat rate on the whole price. So someone who paid £168,000 — close to the Land Registry’s average house price — would have to stump up £1,680. Anyone paying £300,000 would be in the 3per cent band and face a £9,000 bill.You’ll face a bill of several hundred pounds from a solicitor to carry out the legal work and conduct some essential services. These include checking that there’s not a motorway scheduled to be built through your house or that you will not be obliged to contribute to the maintenance of a local church.You’d be surprised at how many homes have covenants attached making the owner jointly liable to fix the church roof. Don’t worry too much — if your home is affected you can buy specialist insurance.As a first-time buyer you may be able to load everything in the back of your car. Otherwise budget for anything from £500 to a few thousand. And don’t forget to insure your valuables while on the move.Make sure you have buildings insurance in place on the day you exchange contracts to buy a property because at this stage you are committed — even if it falls into a sink hole! Your lender does a basic valuation but this tells you nothing except that your lender is prepared to lend you money.The next step up is a Homebuyers Report, typically costing £250 to £500. This gives basic answers to basic questions about a property. It should tell you about aspects of your prospective home using a traffic-light system. Green means no repair needed, amber points to non-urgent defects and red highlights serious defects.The most exhaustive is a Building Survey. It’s costly but may be the safest option for older buildings, or any constructed from unconventional materials.The Land Registry charges for transferring the register from one owner to another. Charges range from £40 to £800. Your solicitor should handle it and pass on the charge.Fees are half-price if submitted electronically; tell your solicitor to use this method. On a £150,000 home it costs £95 electronically, £190 by other methods. Share what you think No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards. 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