What should you pay attention to when taking out a mortgage? With these mortgage tips you can avoid high costs or excessive risk with a mortgage. Make sure you do not fall into these pitfalls when comparing mortgages.
Overvalue pays off
The higher your surplus value on your home, the less risk the bank runs. The banks have adjusted their interest rate policy accordingly. In our extensive mortgage comparison, you can find out for yourself which risk category you are in and what the cheapest interest rate is in your situation (per lender). It can therefore be extra interesting, if you have your own resources, to use this for a reduction in the mortgage. Be well informed and advised on this. You can now know about the London Mortgages in the best ways.
Do not compare based solely on mortgage interest
A mortgage consists of two components: an interest component and a repayment component. A low mortgage interest rate is no guarantee for the lowest net monthly payments. Here are several factors that are important, such as the term of the mortgage and the associated conditions. How can you best compare mortgages? Request a free mortgage comparison, in which these components are extensively discussed.
Opt for a low interest rate for a short fixed-rate period
Mortgage providers advertise with spectacular discounts on mortgage interest. That low interest rate then applies for a limited period, which can be disappointing when the interest rate has to be fixed again. The monthly charges can then go up, so you have to wait and see what interest you will be offered by that time. Either you accept the new interest rate or you switch to a different mortgage provider again.
There are of course costs associated with the transfer of your mortgage . So if you choose this option, calculate your benefit in the longer term, including any additional costs (re-costs).
Or consider a long fixed-interest period
Here too you must calculate the savings over the entire period. Keep in mind that the mortgage interest rate can rise again considerably when your fixed-rate period ends. If interest rates remain the same, your monthly payments will nevertheless rise due to the loss of the interest discount.
With the historically low mortgage interest rate it can be extra interesting to fix the mortgage for a longer period. This way you can fix the interest for a long period with certainty. If you have plans to relocate, a shorter fixed-interest period may still be interesting.
Whether or not to take out a life insurance policy?
If you choose a mortgage that includes a life insurance policy, the provider may give an extra discount for this. As a result, you save on mortgage interest. It is important that you are properly insured in the event of unexpected death, but this is not always the best option. Be well advised in this so that you do not run any unnecessary risks and determine whether this interest discount is interesting for you.
Use your own resources
Own funds can be used in various ways, for example by reducing the mortgage amount or to meet the costs of taking out a mortgage from your own funds. This way you can influence the net monthly costs. To make a correct comparison, it is wise to choose a mortgage on the basis of the bare product, i.e. before the contribution of own resources.