If you are looking onto home loans then there are several things you should consider before signing. In todays market people will tell you just about anything to sell you a house. The housing market has taken a huge hit due to the economy and real estate agents are struggling to make sells. People are also desperate to sell their homes because they can no longer afford the payments.
Always read the fine print before you sell. Know what you will be responsible for paying and when. Is there a time when you payments may go up for any reason? If so then you have to be prepared for that. If you get to a point that you can no longer make payments then you could find yourself in real trouble.
Find out if things like home owners insurance are included. More often than not you will be required to have insurance in case something happens to your home. If it is not insured and something happens then you could still be responsible for paying your loan off. Some banks will include the fee for insurance but if not then you will be responsible for buying your own.
All banks do not charge the same amount for interest. You should shop around and get the lowest interest rate you can to avoid paying a lot more in the long run. Your interest rate may also depend on your credit score. If you can improve your credit rating some before you apply for the loan it could help you get a better rate.
Get your payments low enough that you know you can afford them. Count in all of your bills and know exactly how much you will have to pay each month. Keep in mind that this is long term and you will be making these payments for years to come. Be sure and allow money for extras so you wont have to stress over the small things.
Making even one extra payment each year could save you a lot of money. That is one less payment you will need to pay interest on and will go directly toward the principle amount. Anytime you can do this you may save a ton of money.
Know the fees for late payments. Once you get behind it can be very hard to catch up. Late payment fees could cost you a ton of money. This is another good reason to make that extra payment; if you are late then the extra may cover it until you can get caught up again. As a last resort you may even have to consider refinancing.
Home loans can be hard to navigate. If you have any questions or concerns then you should ask a professional for advice before you get in over your head. If you get a home loan only to eventually have to let the home go back then you have wasted your money and might as well have been paying rent. Always know what you are signing and how much the final cost will be. |
