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Shvoong Home>Books>Hidden cost in mortgages Review

Hidden cost in mortgages

Book Review   by:atosprima     Original Author: atos prima
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The mortgage business has become
so competitive because consumers no longer settle for a traditional mortgage.
Everyone wants more now in terms of service and product offerings. Shopping for
a mortgage is not easy and with banks offering so many options these days, how
do you choose one that fits your requirements? To begin with, you need to
identify your personal objectives. Is the mortgage for an investment property
or a roof over your head? Next, you need to look at your cash flow and
repayment capability. You will then be able to choose the type of value-added
services you would like to enjoy with your mortgage. Those with fixed income
and almost-fixed monthly expenses may not be too keen on a mortgage package
that has a pre-payment or redraw facility because they know they won’t have
regular excess cash to put into the mortgage. They may prefer a straightforward
traditional mortgage instead. The interest rate is the most important aspect of
any mortgage but often, consumers are unable to effectively compare the
interest rates of mortgage packages. A good mortgage must allow you to own a
home at a reasonable cost. Ideally, you should do something around first; you
will get a view of what the different banks are offering in terms of interest
rate, value-added services and terms and conditions. For those debating between
fixed and floating-interest-rate mortgage, bear in mind that the essential
difference between the two is the element of certainty in monthly repayments
offered by the former. Floating rates, on the other hand, will move in tandem
with the base lending rate (BLR). A longer tenure means increased exposure to
interest rate movement (for a floating rate home loan) and this should be measured
against your ability to pay higher interest rates if you’re considering a
fixed-rate mortgage. A good mortgage is one where attractive interest rates go
hand-in-hand with good terms and conditions and value-added service.
Published: March 24, 2007   
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