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A study carried in 2007 by the government discovered that 90% of the participants did not have a basic understanding of some basic mortgage agreement terms. Mortgage to many people is a significant financial commitment hence it is a shock how they could lack knowledge of the conditions of the agreement. If this is the case with you here is a compilation of a checklist of essential information that you should understand if you are planning to get a mortgage loan:
Whether You Need Lenders Mortgage Insurance(LMI)
There may be the need to pay for lenders mortgage insurance if you have less than twenty percent deposit. Lenders Mortgage Insurance is referred to a premium that shall be paid by the borrower and protects the lender against any losses that can be incurred. www.lasvegascustomloans.com will give you more information regarding Lenders Mortgage Insurance.
The Amount Of Deposit That You Have]
You will be offered different Loan to Value Ratios(LVRs) by various lenders. LVR is referred to the percentage of the amount of investment that you can be able to borrow from the bank. For instance, if you would like to borrow $300,000 with maximum LVR being 90% then you can only borrow $270,000. Also, you will be required a down payment of $20,000.
The Fees That Apply To The Loan
There could be some cost and features in your home loan which includes the following;
- Property valuation fee
- Annual fee
- Application fee
- Account keeping fee
- Redraw fee
It is essential to ensure that you have an understanding of the charges
Most lenders display a price that is advertised with a comparison rate. The comparison rate is used for calculation of the average rate on the loan home product for $150,000 loan over a period of twenty-five years with consideration of the charges and fees. Also, some lenders will have an introductory offer or a honeymoon rate which are lower rates offered at the beginning of the loan.
The Best Type Of Loan For You
A comparison between a fixed and variable loan is another feature that you should consider. Look at the advantages and disadvantages each of them and know which best suits your needs. Do research knowing that there are loans that have the ability to split your loan so that there are a variable loan amount and a fixed remaining portion.
Features To Look For In A Home Loan
It is essential to know all the home loan features and what is of importance to you. The amount of repayment and the rates are outstanding, but it is also important that you look for features that are offered in a home loan that you can consider. The following are some of the home loan features:
- Discover more concerning mortgage offset accounts
- Being able to make extra repayments
- A redraw facility
- Ability to split investment between variable and fixed
The interest rate is the primary factor that will affect your loan interest rate. Ensure that you are not paying an uncompetitive rate.
Categories: Real Estate
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