Mortgages,what to look for
It is probably everyone's dream to eventually become a homeowner but without the proper research the dream can become a nightmare. Finally getting that dream home only to lose it to poor planning can leave a bad taste to say the least. The experience of homeownership can be rewarding with just a moderate amount of effort in the homework department. Your mortgage will probably be the largest expense in your monthly budget so it is imperative to know what exactly that expense is going to be. The mortgage itself is easy; it's the additional expenses that can come as a shock.
There are several types of mortgages available, from fixed rate to variable rate and some in between. One attractive mortgage is called a capped mortgage and combines a variable rate mortgage with a fixed which becomes "capped" at a certain rate should the interest rate start to climb. The cost of any mortgage is dependent on the interest rate which can make your mortgage payment vary wildly if you are not careful. Do your research carefully and if interest rates are low lock them in with a fixed rate mortgage if they are high and you expect they might go lower go for a variable.
An interest only mortgage is very popular now and although your principal never changes your payment varies with the financial rates. It is imperative that you understand your exposure because your mortgage payment is not your only expense. You will likely need some form of Mortgage Payments Insurance [http://www.mybusinessbonanza.com/realtor-mls-listings/what-to-look-for-in-a-mortgage.html] to cover you should you become sick or injured and unable to make your mortgage payments. These types of insurance normally cover you for a period of from six months to a year of payments and will cost around five percent of the amount covered.
Another added cost will be insurance to cover your house and your belongings in the event of a catastrophe such as fire or flood or accident. A Buildings and Contents Insurance policy is a must unless you have the financial wherewithal to foot the repair bill or the replacement costs. With add-ons to your mortgage becoming a major factor it is necessary for you to read the fine print. Add-ons have always been there but with mortgage rates at an all time low some of the lenders are getting very creative in the way they make their profit.
You need to know about "early redemption fees" "exit fees" and something called "valuation fees" all of which add to the monthly payment. The point of this whole thing is for you to be as well informed as possible before you go to a mortgage broker or a banker. You must know beforehand what you can comfortably pay for your mortgage. The surprise will be all the additional costs and necessary expenditures that will raise your monthly payment. If you know they are coming and have planned adequately for them by doing your research you can sleep well in the knowledge that you have it covered.
There are several types of mortgages available, from fixed rate to variable rate and some in between. One attractive mortgage is called a capped mortgage and combines a variable rate mortgage with a fixed which becomes "capped" at a certain rate should the interest rate start to climb. The cost of any mortgage is dependent on the interest rate which can make your mortgage payment vary wildly if you are not careful. Do your research carefully and if interest rates are low lock them in with a fixed rate mortgage if they are high and you expect they might go lower go for a variable.
An interest only mortgage is very popular now and although your principal never changes your payment varies with the financial rates. It is imperative that you understand your exposure because your mortgage payment is not your only expense. You will likely need some form of Mortgage Payments Insurance [http://www.mybusinessbonanza.com/realtor-mls-listings/what-to-look-for-in-a-mortgage.html] to cover you should you become sick or injured and unable to make your mortgage payments. These types of insurance normally cover you for a period of from six months to a year of payments and will cost around five percent of the amount covered.
Another added cost will be insurance to cover your house and your belongings in the event of a catastrophe such as fire or flood or accident. A Buildings and Contents Insurance policy is a must unless you have the financial wherewithal to foot the repair bill or the replacement costs. With add-ons to your mortgage becoming a major factor it is necessary for you to read the fine print. Add-ons have always been there but with mortgage rates at an all time low some of the lenders are getting very creative in the way they make their profit.
You need to know about "early redemption fees" "exit fees" and something called "valuation fees" all of which add to the monthly payment. The point of this whole thing is for you to be as well informed as possible before you go to a mortgage broker or a banker. You must know beforehand what you can comfortably pay for your mortgage. The surprise will be all the additional costs and necessary expenditures that will raise your monthly payment. If you know they are coming and have planned adequately for them by doing your research you can sleep well in the knowledge that you have it covered.
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