One of the most exciting things to contemplate, as young people become young earners, is owning a home of their own, and embarking upon their first mortgage loan. It is not a decision to be taken lightly and it should be realized that if it runs for the full term, that first mortgage loan would have cost more than the property it is associated with.
As an example, consider a first mortgage loan of $250,000 at 8% with a 30-year repayment term. By the time the loan was paid off, to the extent of the property becoming debt free, over $410,000 in interest would have been paid. The upside is that over the years domestic property has proven to be a sound investment, and historically prices have risen over time. Therefore, as well as the obvious pleasure of living in a home you enjoy, there has been an overall financial gain.
Please Click Here to visit the Free Mortgage Advice Web Site.
Not least because of the relatively large amount of money involved, those seeking a first mortgage loan should do their homework thoroughly. Not all mortgage deals are the same, but fortunately there is no shortage of advice from which intending homebuyers could benefit. For instance, you may consider a:
Fixed Rate First Mortgage Loan
With fixed rate mortgages the interest rate is set at the start to be continued throughout the term, regardless of whether it is for ten, twenty, thirty, years or any other period. Such a first mortgage loan would have the advantage of ensuring that the interest rate did not vary, upwards or downwards, no matter what else was happening in financial markets. It would be a good way of being aware of your obligations and of knowing that they should remain constantly affordable.
With a fixed rate first mortgage loan, you could be sure that if market rates were, to rise suddenly, your outlays would not be affected. Playing it safe, is a good way forward for many people, and a fixed rate mortgage offers that sort of opportunity.
Adjustable Rate Mortgage Loan
There are undoubtedly many people who have gained financially from an adjustable rate mortgage loan. However, before you enter into such a deal you should be aware that interest rates could go up as well as down. If your finances are less than predictable, an adjustable rate mortgage could be too much of a risk. On the other hand, if your circumstances are absolutely secure, you may consider that some risk is justifiable, and could pay dividends.
Balloon First Mortgage Loan
If you do not intend to remain in your first house for long, you could consider a balloon first mortgage loan. This would provide funds at a low rate of interest for an agreed period of a few years after which the rate would rise significantly. If your circumstances were to change, as a result of which you decided to stay put, your outgoings could rise dramatically.
You should be able to grasp why proper planning and an understanding of mortgage markets is vital. There is no great virtue in biting off more than you can chew. Fortunately, there is so much good advice available, from qualified advisors, books and libraries, and of course the Internet. So please do your homework and you have every chance of negotiating the best mortgage deal to suit your personal circumstances.
Tags:
first mortgage loan
first mortgage loan
No comments:
Post a Comment