Why it is Important to Understand the Terms of Your Mortgage

If you’re looking for a new property, you will need to pay close attention to the conditions of any mortgage you have right now, and any that you are looking at taking out. You cannot afford to only sign something without understanding what the interest rate is, whether you can remortgage and whether the interest rate might change at any point. It’s worth making sure you know how quickly it will be paid back, too – are you looking for an interest only mortgage, or are you paying down the amount you’ve borrowed?

If you’re not confident when reading the terms and conditions, then seek expert advice. After all, taking out a mortgage is a huge financial commitment – it is the biggest debt that most people will end up with in their lives, and it’s also the more severe because if they don’t keep up the repayments, then they could lose their homes.

www.FranklinFirstFinancial.com – Home Loans has a huge range of different mortgage products to choose from. When you’re shopping, you should look not just at the monthly repayments, but the interest rate, whether it is variable, and how over payments are handled – if you try to overpay on the mortgage to explain the balance more quickly, what will the lender do? Will the payment be put towards the balance to reduce the total interest? Are there any penalties for paying back early?

 

Be aware that while in the short term a variable rate mortgage can seem like a great deal, in the long run, it could be seriously problematic if you end up stuck with a lender that increases their rates significantly. You may be able to remortgage, but if house prices fall you could end up in negative equity and stuck with an expensive mortgage.