subject: What You Should Ask Your Home Loan Company [print this page] What You Should Ask Your Home Loan Company
Buying a home is probably the most significant purchase that many people make in their lifetimes. And since this is dedication of anything between 20 and 30 years, it is most certainly not a purchase that you can just run into thoughtlessly!
Naturally the purchase of your dream house would be influenced by the size and type of home loan that you qualify for. If you are thinking about obtaining an ABSA home loan, there are a selection of questions that you need to ask your home loan expert:
What are the various kinds of loans obtainable and what are the differences? The type of home loan you select will be greatly influenced by your lifestyle. The 2 most widely used home loan options are fixed-rate loans and adjustable-rate loans. With a fixed rate loan the interest rate on your mortgage will never change, regardless of what the general interest rate gets up to. The main advantage of the fixed-rate option is that you always know what to expect and you can plan for your mortgage payment with absolute certainty. The main disadvantage, and your ABSA home loan consultant can confirm this, is that fixed-rate home loans are generally set at a higher interest rate than an adjustable-rate type. The main disadvantage to the adjustable-rate type is of course that your month-to-month installment can differ from month to month.
What other expenses will be involved? The house by itself is already a huge expenditure - make perfectly sure that the bank clearly states which additional fees would be involved so that you are not caught off guard. These charges can include anything from doing a credit profile to the appraisal, recording fees and taxes. Discuss this with your ABSA home loan specialist for complete assurance.
Is there an early repayment penalty? Take into account that the lending company is taking a huge risk by providing you with a home loan. In exchange for this, they obviously need to be compensated and this reward is by means of the interest that they charge you for the outstanding monthly balance. If you therefore elect to settle your mortgage sooner, the lender is in fact losing out on some of the interest. Be sure to ask if an early repayment fee will apply and how the penalty will be calculated.
What will happen if I want to change to another home loan company? It is always essential to keep your alternatives open. You can't predict what will happen within the next 5 or 10 years, for that reason you need the flexibility to be able to switch to another lender for whatever the reason could possibly be. Find out if this is possible and if a penalty will be involved.
If you visit your physician, they generally ask you a whole bunch of questions before prescribing the correct treatment, right? Your home loan company should approach your home loan with the same amount of detail. Make sure that they understand your needs and requirements before they make recommendations on your home loan.
