Gone are the days when buying a home was meant for the wealthy.
Whether you are looking for your dream home or to make a property
investment and you don’t have cash, you have an option of applying for a
Realtors are coming up with various projects every
year to enable home buyers to purchase their dream homes. While the
housing packages come with world-class amenities that may be quite
tempting, home buyers need to know that they have to pay a hefty price
for these. Well, taking a home loan is a crucial decision that you have
to make a lot of considerations before going on with it like you have to
check current mortgage rates. The following are some of the important
factors that you must consider when taking a mortgage.
1. The amount of loan that you want
it’s you who can decide the amount of loan that you require, it is
sometimes a good idea to consult the financial experts in matters
concerning money. They can guide you in picking the best scheme that
suits your needs.
Borrowing what you know you can repay without
much sweat is good because you won’t be stressed about the loan. And
since the amount of money that you borrow will determine the repayment,
you should make sure that you don’t borrow more than you can pay
2. Your credit score
Your credit score plays a
significant role in you being approved for a mortgage. Generally, a
credit score of 660 or higher is considered prime, while a credit score
of lower than 620 is considered subprime. What this basically means is
that if your credit score falls in the prime range, then you qualify for
a mortgage with a lower interest rate. But if your credit score is
considered subprime, then your interest rate will be higher, and you may
face difficulty being approved.
3. Type of mortgage
The type of
mortgage that you choose can have a significant effect on its repayment
because the rates of interest to be paid varies. There are two types of
loans. The fixed and variable loans.
Fixed: in this case, the
interest rate remains the same for the entire term. Whether there are
fluctuations in the interest rate fueled by market changes or not, there
will be no effect on the amount that you need to repay. This type of
loan is ideal since you will be paying the same amount throughout.
in this case, the interest rate changes according to the changes in the
market rates making the repayments to vary as well. This type of loan
may not be easy to budget.
4. The lender
When choosing a
lender for your home loan, it is crucial that you carry out extensive
research to get a suitable financial institution. You can check with a
few reputable banks or financial companies for their terms and
conditions in regards to loans and repayment options. Other than that,
you should also check their penalties, customer service, etc. Your real
estate agent can suggest the financing entities she feels the most
comfortable with based on his/her experience with previous transactions.