Juggling Mortgages with Different Banks
Even though the majority of first time applicants will approach individual lenders with the intention of being approved for a mortgage and using the cash investment to purchase their first home; there are others that have been in the property industry for longer and have different ambitions. These individuals often apply to the same bank for repeat mortgages to cover the costs of different homes, or they apply to different lenders depending on the best deals on rates at the time.
Why do people need more than one mortgage?
There are some people that consider the property market a noteworthy industry for investment, while others develop properties and need to borrow cash from banks. There are even those that have the financial stability from their income to be able to purchase several houses and cover the cost of multiple mortgage repayments at once.
Not everyone will be in the position to purchase a $300,000 house outright, but there are those that will earn enough each year to be able to borrow this amount of money and then repay it over time. Although not as common, there are also people that earn three to four times what the average person might make in a year and these individuals are often in the position to invest.
By applying to several banks for mortgages on varying properties, the borrower will be able to keep track of what goes into specific accounts, whilst catering to the repayment requirements afforded by a specific lender. Some people find it easier to apply to one bank when intending to buy more than one home, but the fact is that these lenders will typically dictate their own levels of interest rates.
By applying to several, an applicant can take advantage of fixed rate loans as and when they happen, so if they were to buy a house in 2017 at a rate of 1.5% (fixed), the lender’s rate might not offer the same advantages by 2020. At this stage, they will still be repaying the 1.5% fixed fee, but can consider approaching other lenders with a lower rate in 2020, so as to minimise their expenses for each new mortgage that they take out.