Finding the best mortgage: things you need to know

Planning on taking out mortgage loan? Then, read for must-know facts.

10:21 13 July 2013

• The bigger deposit, the better. If you’re hoping to get a mortgage that comes with lower interest rate, you need to save up more money for your deposit. The best mortgage deals are usually offered to borrowers with the lowest loan-to-value rations. This means that you borrow a smaller percentage of what the house is worth.

 

• Another thing to consider when taking out mortgage are the myriad of fees that come as part of the package. These include booking fee, arrangement fee, etc. These are normally added to the amount you borrow.

 

• Fixed rate mortgage could be the best choice. Fixed rates give you long-term surety of cost. If you don’t like unpleasant surprises and if you want to make sure that your monthly fee will stay the same, stick with fixed rate mortgage.

• Interest only vs. repayment mortgage. With an interest-only mortgage, you only pay for the interest fee every month. This is considerably low compared to regular mortgage repayments because it doesn’t cover the cost of borrowing the money. At the end of the term, you’d still owe the lender the same amount of money.

Repayment mortgage costs more each month. It includes an amount deducted on the loan amount and the interest. At the end of the term, you will be the owner of the property.