Common Mortgage Mistakes
There is more to any type of home, investment or commercial mortgage than interest rate.
Interest rate is an important consideration but it is a common mistake most borrowers make when choosing a mortgage. There are many other factors that can add significantly to the cost of a loan - far more than interest rate alone. Below is a list of factors you must take into consideration to avoid making any of the most common mortgage mistakes..
Varies from lender to lender and can be anything from $0 to $1,000 plus dollars.
This varies significantly from lender to lender and can vary by thousands of dollars.
Some lenders charge up to $500 yearly for some loans.
Paying out a loan within the first 5 years can cost hundreds if not thousands of dollars with some lender.
Exiting your loan at any time can cost up to $1,000 with some lenders .
The quickest way to save on interest repayments is to make extra repayments and pay your loan earlier. If you cannot make extra repayments a low interest rate loan may not be as attractive as it seems.
These features offer flexibility and can be valuable tools for reducing your mortgage quicker, however, these features can cost extra in the way of fees or higher interest rate.
If you are ahead of your loan repayments you may be entitled to redraw these funds. These fees can be as much as $50 per redraw.
- Many people do not understand that there are many restrictions applied to fixed rate loans such as making extra repayments and redrawing from the loans account. Also, there can be sever penalties for breaking a fixed rate contract early. Sometimes this can cost into the tens of thousands of dollars.
Portability allows you to transfer your loan from property to property without incurring the excessive fees of closing out a loan and applying for a new one.
Lenders that have been in the mortgage market for a short while may not offer the same level of service or ongoing competitive pricing.