When shopping for a home loan, it is crucial that you fashion your home budget as part of your total budget. Monthly payments take a chunk of this total budget and you run the risk of spreading your income thin to meet your daily expenses if you are not careful.
Crunch all the numbers and work out exactly how much you can afford to pay toward your home loan every month. This will help you determine the size of home loan you can comfortably afford to borrow.
Saving up for a deposit is something that you cannot ignore because the lender will consider the size of your deposit while fixing the total home loan amount.
Why Home Loan Term Is Important?
The tenure of your home loan is a control lever for setting monthly payments. If you want lower monthly payments then opt for a longer term and vice versa. Again if you are on a shoestring budget then lower payments are more suitable but will be costlier in terms of interest payment over the life of the loan. A shorter term means higher monthly payments if your purse permits. You also enjoy the benefit of getting over your loan liability quickly and lower total cost of the interest payments. You can find various loan options on Home Loan Comparison co.
Frequency Of Repayment: Choose Carefully
This option is not universally available with every lender. But if an option of weekly, fortnightly and monthly payment is available look at them carefully. Convenience is a feature of monthly payments but the other two will save you on interest and enable you to pay your principal earlier.
Mortgage Protection Insurance Useful
Mortgage protection insurance is a risk cover for sudden illness, injury, divorce etc. when your finances could be in trouble. Remember you need to pay Lender’s Mortgage Insurance if your borrowing exceeds 80% of the loan.
How Extra Features Help
Home loans extra features are interesting to look at because they add flexibility to pay off the loan that suits your needs. Study what features like an offset account, redraw facility, extra repayments can be used to lighten the burden of your home loan. One of the best ways to save on repayments for your home loan is to shop around on Home Loan Comparison co for the best offers and features.
- @ August 1, 2019 7:33 pm