Mortgage Facts: 6 Basic Things
Your house is probably one of your biggest investments in life. You surely would not want to lose your most-priced property with just a mortgage loan. Ignorance can cost you your possessions. Here are the things that you should know about mortgage loans.
The Interest Rate
Before signing a mortgage loan, you should know how much interest would you pay for the entire duration of the loan. Loan interest differs depending on the loan agency and the amount you are trying to loan. You should know your entire loan payment with a piti payment calculator with the interest rate before you sign. The interest rate should also have reasonable loan term. It would not be wise to go for a low interest rate but a short loan term.
It is wise to avoid interest-only mortgage loans. You might not get ownership of the home if you are unable to purchase it at the right time. It is highly recommended to go for loans with adjustable rates.
There might be times where you have to pay for miscellaneous fees before you could get your loan. The monthly or yearly payment for mortgage loans can be drastically reduced depending on your upfront payment. Consider the upfront payment and rolling costs seriously, especially for long term mortgage loans. The interest rate plus the rolling cost might stack up over time which could really become a burden.
Mortgage Loan Vs Cost of Ownership
Your mortgage terms should always coincide with the home you are planning to buy. Always consider your monthly income before deciding to buy a specific home.
Try using a piti payment calculator to get exact calculation on your monthly mortgage loan. If you are getting just enough for your monthly income, avoid buying luxurious houses.
Before you can successfully own a property, you will still have to pay for other payments aside from the mortgage. Get a piti payment calculator to know your exact monthly payments. After your calculation, you should assess if you can afford your prospective house. There are a lot of better choices when it comes to houses. Avoid getting into debts just to get your desired house.
Always review the mortgage terms before you sign it. Are there additional fees if you cannot pay on time? If you want to fully pay the loan, is there any discount for the interest? Do not get a biweekly payment type of mortgage loan. Use a piti payment calculator and enrol yourself in automatic payment, if possible. For big upfront payments, you should be able to acquire a low interest per month.
Review the loan to see if they will let you pay for additional charges. There might be warehouse charges so you should calculate it via piti payment calculator first to see if the charges are reasonable.