Archive for July 2018

Perfect Preparations for the Right Mortgage

Mortgage should be taken only if it does not become an unbearable burden for you, sucking all the juices out of you and your family. In the meantime, one can see quite another thing: the desire to get the coveted square meters into the property is so great that many exaggerate their ability to cope with mortgage payments. Take his mortgage loan only if you have 30% on hand, and even better 40% of the initial payment of the cost of the apartment. The support is there from the mortgage broker Geelong .

If you have 10-20% of the initial payment, payment of a mortgage can be too much for you.

An example from life

  • I’ll tell you on the example of one of my clients, why a mortgage can be unprofitable. This client is an employee of the bank, its official ZP – 70 thousand dollars. At the time of the conclusion of the mortgage loan agreement, he was unmarried and had no children. The bank approved for him a loan for a sufficiently long period – 10 years – for a total of 2.5 million dollars. Also he had accumulated 1 million. For 3.5 million, which were in his hands, we were able to buy him an apartment in the nearest suburbs.
  • The monthly payment for the mortgage was 37,000 dollars. Remember the size of your salary! Rent of such an apartment was then worth a maximum of 17 000 dollars. If you count, it is more profitable to rent an apartment for rent, than monthly in 1,5-2 times more expensive to pay for mortgage interest.
  • Of course, everyone wants to own an apartment or a house – this is a reliable investment of money, stability for the family, an inheritance for the children. But there is one “but” – the tendency to buy housing is characteristic only for the country. In many countries of the world, both in European and Asian, most people live on rented living space. Why do we have a different way, perhaps, could say psychologists and sociologists, but the fact is a fact.

Yes, when you pay rent, you give money for housing to some completely strangers. This money is a pity to lose. But with a mortgage, you also have to pay, and the amount is 2 times more.

In addition, the first years you basically pay interest to the bank for the entire period, that is, 10-20 years in advance, and not the cost of your apartment. The “body” of the loan for the first years remains practically unchanged.

If in a few years you cannot repay a loan for some reason, then you will have to sell the apartment and settle with the debt.

Take a mortgage for a shorter period.

The longer you pay a mortgage, the higher the interest rate and the higher the amount of overpayment.

If you plan to partially repay the debt ahead of time, then it will be more efficient to “work” with a shorter term of mortgage lending. With a longer term, early payments will also go to the account of payments to the bank and not greatly affect the reduction of the “body” of the mortgage.