Mortgage loan with a surprise
Today, often the only solution for those dreaming of having their own “M” is a mortgage . Often we have a choice to share the corner with grandparents or parents. Of course, we can rent a flat and fill the wallet with someone else, and we will be left with nothing. It is difficult for us to reconcile with the fact that by putting aside the apartment every month, we will only reach somewhere around fifty. When the best years of our lives may have already passed, will we fully enjoy this angle. In the meantime, there were children and grandchildren in the world whom we would also like to help.
If we do not have adequate resources and we do not have rich parents, the only and probably the best solution will be a mortgage . So what if we make a 30-year commitment.
When we diligently read the contract, negotiate favorable conditions, use the appropriate insurance for us, this obligation will not burden us excessively, no more than the monthly fee for renting someone else’s apartment.
Let’s face it, it’s a terribly long, complicated and often edited in an incomprehensible language, containing a lot of legal tricks, a form that is difficult to deal with on your own. Read it with due diligence, it’s ultimately your financial commitment for many years. Before you sign this contract, dispel any, even the slightest doubt.
“Promotion” – this word still mesmerizes most of us. It seems to us that if there is something in the promotion, then we simply get an opportunity that has not yet been and probably will not be. Why not use? Even because nobody gives away anything for free.
With such promotional mortgage loans , highly praised and recommended by bank employees, we should be vigilant and make sure that this loan not covered by the promotion is not more advantageous.
How will we receive the cash?
Usually, with loans taken out for building or renovating a house, the bank pays us money in tranches. And here, before signing the contract, it is good to read the terms of payment of subsequent tranches. Usually, the borrower is required to submit relevant documents before paying any further.
What are the loan costs?
Until recently, you could add a fee to your loan costs just for submitting your mortgage application . Fortunately, most banks are abandoning this practice, although in some we can still encounter this type of fee.
Loan interest rate
This is undoubtedly the most important part of any commitment, be it a loan or credit. The amount of this interest rate depends on two basic factors, one of which is variable and depends only on stock market nuances, it is not influenced by us or the banks, while the other is the margin, and we can negotiate the amount with it.
However, the course of these negotiations depends on the amount of credit and own contribution.
As for the entire interest rate, the customer has the right to choose between fixed and variable interest rates. The variable interest rate is set on the basis of market rates, and when they increase, the installment increases, when they decrease, the bank is obliged to lower it.
Its height is between 0 and 3%. So, in the case of a mortgage, the amount of commission can be up to several thousand dollars. Let’s assume that we borrow 500,000 USD, with a commission of 3%, then its amount will be $ 15,000.
Real estate appraisal
It is also a necessary element when granting a mortgage , which undoubtedly increases its cost. Sometimes it can even be several thousand dollars.
We can use an appraiser proposed by the bank, in another bank an appraiser may be imposed on us and sometimes banks give us a free hand and we can independently look for a specialist in real estate valuation and choose the best offer. The cost of such a valuation largely depends on the appraiser himself, but also on the type of property and its location.
Commission for early repayment of the loan
This is a fairly important paragraph of the agreement. Credit agreements often contain a reservation regarding the repayment deadline for all or part of the loan, which cannot be made before a certain, specified period expires. If we pay off too soon, we will incur an additional cost in the form of a commission for early repayment.
Fee for increasing the loan amount
This is another important element that we can expect in the content of the contract. When we decide to increase the loan amount, the bank may require an additional fee from us.
Let’s pay attention to the amount of real estate insurance, against job loss or life insurance.
Fee for currency conversion of a loan
this aspect applies to borrowers who take a loan in a foreign currency.
The most important element, not negotiable
Most often it contains several pages of text, written in small print. It is attached to the quick loan and mortgage contract.
REGULATIONS!!! We don’t have the slightest influence on what it contains. The conditions set out therein are not negotiable. Let’s get acquainted with every detail, especially the smallest one, before we sign it.