It is very important for you to obtain an appropriate mortgage as you will be saving a lot in the long run. Financial institutions will offer different kinds of plans and rates but how is one to select the right plan? You can either consult a financial consultant or read the tips below:
Reason and need for the loan
What is the purpose for which you require the loan? Investing or buying a house. What you need would be a residential investment or home loan. Now you need to decide the kind of loan that will suit your requirements. Would you prefer a variable or fixed interest? Or would you prefer flexibility of terms to save some money on interests. Do you want credit facility on your account for home enhancements or personal purchase? In how many years can you repay the loan and on what conditions?
Feature of the loan
Find out the features of each loan plan and measure it against your needs and which is more significant to you. Interests on loans for the purpose of investment are tax deductible and you are permitted by the bank to divide your loan in to different small types to save on interest. Given below are some of the distinctive features of loan:
- Portability: In case you are thinking of relocating to a new home, such a loan will permit you to keep the same by paying a small fee so that you do not have to apply for a new loan again.
- Extra repayments: You are able to pay more than your monthly repayment amount so that you can repay the entire loan in very less time.
- Credit facility: The loan will have a feature which will offer you credit facility to buy materials on home improvements or personal items. This way you will not have to apply for a new loan. The bank will have to approve such feature and it will enhance the credit limit of the present loan.
- Redraw: If required, you can get any further repayment made by you.
- Repayment holiday: If you make extra repayments in a month or months then you will be permitted to skip certain number of repayments as long as the repayments that you have made are enough to cover the skipped ones.
- Parental leave: Pertaining to certain terms and conditions, you will be permitted to decrease the monthly payment by half.
- Mortgage offset: Your mortgage is linked with your transaction account. This will permit you to decrease the mortgage for each dollar in the account.
- Income to loan account: Interest from the mortgage can be saved if you deposit your income directly to your loan account. Simultaneously, you will be able to pay bills or get your funds via automatic transfer accounts.
- Consolidation of accounts: You can save interest on mortgage and still access your money by consolidating your accounts in to one for savings, credits and transactions.
- Re-fixing: Here you can change the fixed rate of loan when the period of your fixed rate is completed.
- Continuous expenses: Give the preferred loan features priority and calculate the expenses that you will incur continuously. You can save on interest rate and expenses if you maximize the features of the loan. The way you manage your finances and lifestyle will determine your loan as this will show your ability to pay it off.
Note: Mortgage indicates that you agree to something and it will last till you die. Mort is a French word which signifies death. Check out the terms and conditions of the mortgage as it is a guarantee to repay the loan taken to buy a home. Or else you will have to pay for it as long as you live.
Billy Chen
(+65) 8868 9999
Fax: (+65) 64021826
billy@billychen71.com ( email me )
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Billy Chen billy@billychen71.com Tel: (+65) 8868 9999
Fax: (+65) 64021826
