Four Tips for Choosing 3rd Mortgage Lenders

Have you considered applying for a third mortgage for a while, but you’re afraid that the moneylenders won’t find you eligible? Actually, a lot of people are hesitant when it comes to taking out a third loan, as financial institutions don’t consider them as credible, taking into account their previous credit history.

Nevertheless, there are numerous people who managed to get their application approved, mainly owing to their high income and good assets, which serve as a solid guarantee. In fact, you can find plenty of 3rd mortgage lenders who are willing enough to provide you with a credit, as long as you provide them with a solid reason for your application.

These tips will ease you the process of finding one. 

Gather the necessary documentation

In order to qualify for a third mortgage, you have to gather all the required paperwork with updated information regarding your credit history. As you’ve already been through this type of process with the previous two loans, you know which documents are crucial when it comes to loan approval.

Therefore, make sure you gather the paperwork that gives insight on your debts as well as capital. Pay off as much of your antecedent debts as you can, in order to be a more credible candidate. Also, lenders will require a written document that states your income as well as the assets. The higher your income is, the greater are the prospects of getting approval. 

Nevertheless, bear in mind that the application process for the third loan isn’t going be as smooth-going as the previous ones, since moneylenders consider third mortgages as high-risk. According to them, the chances of you paying a credit back get lower, as the number of credits you apply for gets higher. Thus, the probability of getting a 3rd loan is significantly lower than the one you had when you made your first application. Read more about the factors that make you a more eligible candidate. 

Perhaps, your prospects of getting a 3rd mortgage will look better if you apply at the same bank, as it’s already familiar with your credit history. However, if the bank is reluctant to approve your application, it doesn’t suggest that you shouldn’t try your luck elsewhere. 

Determine the reason for taking out the loan

Prior to starting your quest for finding a moneylender, make sure you know the exact reason that encouraged you to apply for a third credit. Banks will be more than interested to hear a solid reason in your type of situation, as owing to your previous credits, you don’t seem like a reliable candidate. 

Moreover, some of the most valid reasons would be purchasing another property apart from your home for personal needs or purchasing one for buy-to-let purpose.  In the latter case, candidates are more likely to get their application approved, as they plan to use the property for subletting, which earns them money unlike the former case where 

the property serves solely for personal use.

Another factor to consider is the time-frame in which you intend to pay the credit back. In case you plan to pay it off in a longer period of time, your monthly installments will be lower while your interest rate will be higher. 

On the other hand, in case you plan to pay it off in a couple of years, naturally the installments would be higher, but the calculated interest at the end of the period will be lower. Visit the following link: https://medium.com/@gulsenaaynur/what-factors-affect-home-loan-rates-ce894fa32d78, to learn the main factors that impact the interest rates.

Inquire about interest rates from various moneylenders

Although in the case of third mortgage you don’t have as much choice as you had in the preceding two, you still need to consider your options before making a decision which moneylender to choose. Make sure you ask for the interest rate after stating the intended period of paying the credit back. 

Banks will offer you different duration and interest rate options, which you’re supposed to compare in order to determine the most affordable solution for you. In addition, don’t forget to ask whether the interest rate is going to fixed or variable. 

Actually, the former one goes more in your favor, as you’d be notified on the fixed amount of money you’re supposed to pay for interest over the years. However, in the latter case you don’t know how high the rate can go, risking to pay much more money for interest, than you’ve planned. However, expect high rates due to the higher level of risk.

Choose a licensed and reliable lender

Regardless of how desperate you’re to get your 3rd mortgage, never settle for a lender who isn’t licensed and reliable, as you’re likely to get tricked into paying much more money for interest than you normally would. 

Therefore, make sure your first step is to check its license, as you certainly wouldn’t like to deal with an unlicensed loan shark who doesn’t work in accordance with the law. Also, go through some reviews on various lenders in order to easily locate the most reliable ones in your area. Stay away from shylocks, as they won’t respect the terms you agreed upon and alter them whenever it seems fit. 

Wrap up

Finding a 3rd mortgage lender might be an arduous quest, but it certainly isn’t impossible.

Don’t give up, before you even try it!