How To Choose The Best Mortgage?

24 Sep 2014 in Finance

Acquiring a mortgage is among one of the most important financial decisions of life and for a young adult who has begun a working life, means building a secure and lasting legacy.

Knowing the basics of a mortgage will help you choose the best time to take this step according to your interests.

1. Am I ready to finance a mortgage? A mortgage is a loan in the medium to long term to be paid in monthly instalments. Sometimes the cost of this will be a little higher than normal income, so it is essential to have good financial standing to meet timely payments. Note also that there are three types of interest rate (fixed rate or variable rate and mixed rate) which may vary over the life of the loan period.

2. What profile must meet to be good candidate for mortgage? For a financial institution grants credit without problem must have good financial background, seniority and higher income to the loan amount. There are tools that can help you simulate your financial situation to have a clearer view of the conditions and terms to which you can commit.

3. What should I expect to make the first payment? probably the first to begin the liquidation amount of a mortgage loan is a little higher than others because some financial institutions may require is not very commonly thought of up to 20% or 50% of the value of the home. It should be borne in mind that the total fee which is committing not exceeds twice the amount of their annual income.

4. Is it possible to cancel the monthly payments for a while? In case you cannot afford the mortgage payments, is not easy to “freeze” or simply cancel the fee, as opposed to a rent; cancellation requires a much longer process that could mean relist the property, pay off the outstanding balance with the bank and bear the costs of this process.

To keep an Eye Keywords

• Interest:

The financial institution that will accompany you throughout the payment of the mortgage payment, has accompanied charged interest until the liquidation of the credit are met. Keep informed and inquire about these charges before, during and after this process can save many headaches.

• Budget:

If you are ready to commit to paying a mortgage, must also have experience bringing your monthly and yearly budget. It should include all income and expenses involving: salary, insurance, Rates leak, services, current income, taxes and of course the first deposit and monthly payments of your new mortgage.

• Interest Rates:

The volatility of interest rates is important before and during the purchase because they will determine how much and what will pay for the credit lifecycle. Your financial adviser can be of great help to resolve your questions about these interests.

• Paying Off:

Borrowing costs is important but so are how much of each payment goes to interest and how much capital. Look for the greatest percentage of credit capital is paid from the beginning. This is important if you want to sell the house because it will be “owner” of the property in each monthly payment.