Author Topic: What to Look for in a Mortgage Loan  (Read 1718 times)

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What to Look for in a Mortgage Loan
« on: March 24, 2012, 09:01:46 AM »
The world's economy may be uncertain but experts are hopeful for a housing recovery inAustraliain 2012. With rates and housing prices at favorable levels, now is the perfect time to buy a home. Of course, anyone who has considered buying a house knows that it's a huge investment – perhaps the biggest of your lifetime – so it's important to choose the home loan that best suits your needs.Need Cash Now

Loan Types

There are two main types of home loans. The first is a fixed-rate loan. This loan has an interest rate that does not change for the duration of the loan. A fixed-rate loan is a good option if you're planning to stay in your home for a long time. It's also a good choice if you're someone who isn't comfortable with change and would prefer your mortgage payment to remain the same even decades from now. The drawback of this type of loan is that if interest rates decline your rate is locked in so you won't be able to take advantage of the lower rates. On the other hand, if interest rates go up you won't have to pay more.

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Another home loan option is a variable-rate loan. Variable-rate loans are the more popular loans inAustraliaand often start with lower interest rates than fixed-rate loans. This is a plus for people who can't afford to pay as much for their mortgage. This interest rate for the variable-rate mortgage can fluctuate with the market so if you could end up paying more or less than your initial rate depending on the market.Need Cash Now

Loan Terms

Mortgage loan repayments generally last from10to 30 years. The longer your payment term is, the lower your payments are. But if you choose a longer-term loan you'll pay much more in interest than you would with a shorter-term loan. The standard term for home loans inAustraliais 25 years. With this term the payments are a little higher than those of a 30-year loan but the total cost of the loan is lower.

Educate Yourself

With so many loan options in today's marketplace it's important to take time to do your homework before deciding on a home loan. Borrowers can go online and conduct a home loan rates comparison Australia wide to narrow down the list of lenders and products and determine what fits best. Make sure to ask questions, verify terms and find out about any hidden costs to avoid costly mistakes in the future.Need Cash Now