Things to Consider when Shopping for Mortgage
Obtaining a mortgage is a big financial commitment. It is important that you are aware the ins and outs of the process. Knowing the main features will help you find the right mortgage that will suit you best.
You can opt for a flexible mortgage. This is something that you can get if you plan to pay the full amount before the full term without the big penalty fees. There are features under flexible mortgage. First are overpayments. You can choose to pay more than the monthly payment fee and you can do this by paying lump sum or monthly. Paying lump sum will have a lower interest rate since the interest rate is calculated on the total amount that you owe. Underpayments and payment breaks are a feature of flexible mortgage. This feature will allow you to pay less than the normal monthly fee for a limited period. Some mortgages will allow you to stop making payments at a longer period. So in case you lose your job or your business, this feature will be really of great benefit to you. The last feature of flexible mortgage is loan drawdown.
This will let you borrow money without further approval from your lender. This can be done as long as your loan does not exceed an overall limit. Plus a good thing is you can borrow back earlier payments that are made.
Another type of mortgage is offset mortgage. This means that your main current account or savings account is linked to your mortgage. These accounts are usually held by your lender. Each month upon calculating your interest due on your loan, the amount you owe on your mortgage is reduced by the amount in your accounts.
A cash back mortgage is a good choice if you are looking for a big cash back payment. This usually comes with interest-rate deal. This means that the lender will pay you an amount after you take up the loan. This can be 3 to 5% of the amount that you borrowed. If you want to have extra cash to payback other expenses, then this may be a good option.Â