You will agree that not every new parent can afford the resources to buy a house at once, as a result of this, many rule out or keep postponing the idea of becoming homeowners. The unfortunate thing here is that, some don’t know they can buy or build a house through mortgage.
Let’s further understand what mortgage is all about and how to use it to realize your dream of becoming a home-owner.
Mortgage is simply a type of loan given by a bank or mortgage lender to individuals or group to enable them builds or buy houses. Access to mortgage facility goes a long way to assist many who cannot do outright purchase to buy or build their own houses. The house usually serves as collateral for the money borrowed, which is usually repaid on a long-term repayment arrangement.
It is necessary to understand the various types of mortgage available. Below are types of mortgages include:
- Fixed Rate Mortgage
- Variable Rate Mortgage
- Balloon Mortgage
There are some things new parents should consider before going for a house mortgage. As exciting as obtaining a mortgage plan can be, it is important you perform some key evaluations which are:
- Is my Income stable?
- Can my income meet up with the mortgage plan?
- How long can I remain on a mortgage plan?
- Any house ownership made easier with National Housing Fund and am I eligible to access the fund?
Once you have answered these questions, you need to take into consideration the following factors before approaching your bank for a mortgage loan.
- Are you mentally prepared for a mortgage?
- Can you pay back?
- Read the terms very carefully
- What if the worst happens?
- Mortgage brokers are not banks
- Do not organize a mortgage over the internet
- Mortgages are profitable
- Get ready for extra fees
- Interest-only loans are to be avoided