Posts Tagged ‘Flexible Repayment’
When choosing a loan or mortgage, many people make the mistake of looking at only the mortgage rates. There are various features other than mortgage rates that should be considered while making the final choice.
The first thing that you need to think about is the main objective that you have for the mortgage that you are applying for. You need to think about whether you are looking at combining all your mortgages and loan accounts or trying to reduce the overall mortgage rate.
What you may also want to consider is whether the loan you opt for allows for flexibility in repayments. There are various mortgage products that do not allow such flexibility. This means that you are stuck with a mortgage even if you have the capability of repaying it off earlier. And then there are some mortgages that allow for flexible repayment but they also charge a hefty early repayment fee.
Needless to say it is important that you read the fine print on any mortgage product that you are planning to opt for. Sometimes mortgage rates may seem low but the same may be compensated by large initial fee or monthly service charges for the loan.
Other aspects that you may want to think about include additional repayments, salary credits, loan portability, late payment charges, redraw facilities, repayment holiday and top up possibilities. Each of these need to be thought through based on your specific circumstances. For example, if you know that your job is likely to have a break in between and you may just have a phase of limited or no income, you may want a mortgage that allows a repayment holiday.
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