Commercial mortgage loans : Here are a few tips on how not to get a mortgage, and underneath each one, the smart thing to do instead.
1. Don’t haggle.
A mortgage or a house is just another consumer product. A few clever words can get you a sweeter deal. So haggle!
2. Don’t look at the small print.
Companies may offer very low rates upfront, but hide additional costs in the small print. Beware of additional costs not immediately apparent.
3. Go for a long term.
Try to keep the term of the mortgage as short as possible. The shorter the term the less you pay in interest. Consider a twenty or twenty five year term instead of thirty years if you can afford it.
4. Buy the most expensive property you can (barely) afford.
Resist the urge to splurge. Some lenders will offer up to six times your salary. They’re not doing you a favour. Get the minimum the missus will be happy with. Divorces can be triggered by loan defaults.
5. Ignore your credit rating.
Improve your credit rating as much as you can. Pay off old loans, and once they’re paid off, check your credit report. Ensure you pay all your bills on time (or before time); never later than the due date. Pay off credit cards and keep their balances low. Close unnecessary credit card accounts. Open a savings account at your bank if you don’t already have one.
6. Focus on the interest rate.
Don’t get too caught up in comparing interest rates and various special offers; they may not reflect what you will get if you apply. Everything depends on your own financial circumstances and the types of features of a loan that are important to you.
7. Ignore your outgoings.
Write up a budget of your monthly expenses; factor in daily, weekly, monthly and yearly outgoings. See how much you can truly afford to put towards repayments.
8. Rush to take the time-limited-one-time-only-discount-special-offer.
The deal that seems too good to be true probably is. Avoid jumping straight into what could be the biggest purchase of your life. Check it out first.