Homeownership: Critical Factors for Choosing the Right Financing

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When purchasing a new home, you must consider different factors and research the real estate market. This will help you ensure that the best decisions are made for long-term residential comfort and profitability. One of the important aspects that you should be keen about is the financing for the new property. Generally, you will need to acquire a home loan unless you have saved a lot of money for this purpose. The process of finding the right loan can be difficult since there are numerous lenders, brokers and mortgage packages to compare. Here are simple considerations to help you select the best loan.

Interest Rate

The interest rate is the most obvious factor to consider when choosing a home loan. However, the process of comparing this aspect can be difficult because the advertised rate will not necessarily match your understanding. For example, most mortgage banks provide a low introductory loan rate for new customers to attract clients. Moreover, there are loans with a variable rate to accommodate the needs of some customers. The obvious quoted interest rate will be the lowest, and this can be confusing for first-time homebuyers. Therefore, inquire about the interest rate for the entire period to determine whether the loan is affordable for the long run.

Deposit and Insurance

You will need to provide a deposit for your residential property if you are interested in acquiring good home financing. In simple terms, there is an important element known as loan to value ratio. This is the actual percentage of the total home purchase amount that you can get from a lender. For example, if the ratio in your preferred financing institution is 90%, you can only borrow $360,000 for a $400,000 property. Therefore, ensure that you understand the LVR before making an application. You should also note that some lenders will require you to pay lenders mortgage insurance, especially if the deposit is low. This premium will mitigate the losses in case you fail to pay the loan.

Additional Charges

Finally, you should consider any additional charges that might be imposed for your home loan. These small fees might seem minimal individually, but the cumulative amount can interfere with your home purchase budget. The common charges can include mortgage application fees, account keeping charges and property valuation fees. In addition, there might be payments attached to redraw and annual services. Therefore, when you choose a suitable loan package, ask for an outline of these charges so that you will factor them into the home buying budget. 

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20 April 2016

Boosting Your Home Value Before the Appraiser Arrives

Welcome to my blog. My name is Anita. I am an artist and a writer, but I like to create with any canvas that I have, and that includes my home. I see homes as almost blank slates that need special touches to make them shine. Over the years, I have received a lot of calls from friends. When my friends need to sell their homes or have them appraised, they call me for advice. I think I've helped a lot of them get higher evaluations than they would have otherwise, and I love advising them. If you want tips and ideas on getting great appraisals, this blog is for you.