SRIWIPA SIRIPUNYAWIT
Before applying for a mortgage, examine your financial status, says Duc Nguyen, president of LiveSmart.
You need to find out about your income, expenses, debts, obligations and the like - checking how strong or weak your financial status is.
- Look at your plans for the future. You will need to know if buying a new house is your only plan for next few years or if you intend on pursuing a higher education, having a child, sending your children to international school or universities, leaving your current job and enjoying retirement.
All these plans will affect you financially. So, be sure you have everything figured out before taking any decisions.
- Shop around and do research. Talk to as many banks as you can. However, don't completely rely on bankers, let alone real estate people. Ask them for information, but make your own decisions.
- Compare all the choices you have. This usually involves a lot of calculation and some mathematics skills. If you don't have an inkling, talk to a professional.
- Don't just look at interest rates charged by the lenders. It's actually one of the features that must be seriously taken into account. They include flexibility of extra payment, penalty rate, appraisal fees and payment terms and other conditions. All features must be weighed. Looking at interest rates alone could lead to a wrong decision.
- How fast the loans can be approved shouldn't be a big factor for consideration. However, there are quite a number of borrowers falling into this marketing tactic lured by the banks saying they can approve loans within a few days.
The fact is: Why do you need the loan immediately? Buying a house is not something you can do in a rush. It takes time to find the perfect house and a reasonable loan. So, all decisions must be made with great consideration.
- Choose a mortgage that matches your needs. Each borrower has a different financial status and future plan. Thus: Different loans with different features.
1. For those who are willing to make personal sacrifices to pay off the debt, can plan to pay extra or a large sum after a few years. So, a mortgage without penalty fees and no limits may be better.
2. For those with existing debts, a mortgage offering fixed interest rates for a long term are useful since they rates are first pegged and risks can be predictable.
3. For those who are reluctant to make personal sacrifices may opt for a mortagage allowing them to pay a lower monthly instalment with a longer repayment period.
No matter what mortgage you chose, make sure it's affordable now and in the future.
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