It’s always a good thing to prepare yourself when you plan to buy something as crucial as your own home. There are few things you need to know if you’re going through the home buying process for the first time. Here are a few important factors that you should keep in mind before signing on the dotted line:
Your credit score:
You must know your credit score before you’re start looking and applying for a mortgage. Credit score plays a crucial role in determining your mortgage approval and ultimately the rate you end up with.
How much you actually can afford:
You’ll have to make monthly mortgage payments, so it’s essential to decide how much you can afford. Keep in mind that your monthly costs for housing include property taxes, homeowners insurance, maintenance and utilities. Any assumption of your affordability must go beyond interest and principal payment and include these extra costs.
Type of mortgage loan you want:
You have to do your homework as there are loads of mortgage loan options available in the competitive market. Make sure that you have proper knowledge about mortgage loans before making decision and agreeing to an offer. Consider your present financial situation and be realistic about your future financial conditions. It would be wise to choose a mortgage loan unless you plan on living in the place for a shorter period of time so that during resets, it won’t put you in financial crisis.
The interest rates:
Knowing the different interest rates offered is a crucial step when choosing the best mortgage loan option. In Singapore, 2 main types of interest are offered. One is a fixed interest rate, agreed on by the bank. It stays constant throughout the agreed duration of the loan, usually the first few years. The other option is a floating interest rate, which is pegged to the performance of a benchmark rate. If used at the right times, the floating interest rate can save the borrower a lot in paying off interest. It is crucial to know your options for your first mortgage or if you are looking to refinance housing loans in Singapore.
Find who offers the best deal
You need to carefully find a lender before you make your up mind and sign to a mortgage application. You can see their exact charges and ask about other fees and costs. You can collect that information from different lenders and compare mortgage loan rates in Singapore. A little bit of research will help you get the best deal.
These are some crucial points that you need to remember before applying for a mortgage loan. Make sure you’ve gained adequate knowledge about mortgage doing your homework. You should know what you want and who is going to offer your desired mortgage. Knowledge will be really a huge help for you when it comes to mortgage and finances.