4 Mar 2011
One of the fundamental parts of buying a home is of course figuring out how to finance it.
For most of us a mortgage is needed to purchase a property and before we take one out it’s important to do lots of research and compare different mortgage options.
A lot of people start their mortgage search online, but it’s also a good idea to go and have a chat to a mortgage broker or financial lender as they may be able to offer you invaluable advice and point you in the right direction.
In general, you will probably be advised not to spend more than 30 percent of your household income towards a home loan, but this may vary depending on your situation.
Here are some other things worth considering when it comes to home loans:
Fees – Home loan products can look good if they have low interest rates, but beware of hidden fees and charges.
Family Changes – If you’re planning on having children in the future then this may affect your financial goals.
Financial Changes – There are a number of reasons why financial situations may change. For example changing jobs or undertaking study.
Fixed or Variable? – Fixed loans are a more secure option but variable loans can have many benefits too.
Exit Strategy – How long do you intend to be paying off your loan? Do you intend to upgrade your home and sell it in the short term?
Features of your mortgage – Does you mortgage offer you any special features such as credit or debit accounts etc?
There are a lot of things to consider and compare when choosing a mortgage, so look through all of your options carefully.
Of course not all buyers choose to have their finances pre-approved, but if you’re going to make the purchase of your property conditional upon finance, then it pays to at least have checked that your capable of borrowing the amount that you need to, so you don’t end up disappointed.