“Property is always a great way to invest in your financial future and it is also a great feeling to be able to own your own home. If you can buy at a time when interest rates are low or when the Government is offering some sort of benefit to home buyers, then you can be off to a good start with either your new home or your investment property. Interest rates don’t always stay low though so it is important before buying any property that you get some financial mortgage advice.
Buying a house can be quite a stressful time as there are a lot of different financial aspects to consider. There are many different types of home loans and you want to find the right one for your current situation. You can’t base a home loan on the current interest rates, you also need to consider future possibilities of interest rate increase and also wage changes.
There are many stories of home owners losing their homes when the interest rates rise and so does their mortgage repayments. Even when a person takes out a home loan on a fixed rate, there comes a time when that fixed rate period runs out and the mortgage is then put on a variable rate and repayments may rise. For many people, when their fixed rate period expired their monthly repayments doubled and they could no longer afford to meet their repayments.
When considering purchasing a property it is advisable to seek advice from a professional financial mortgage advisor. A financial advisor can explain all the details of all finances involved in purchasing a property; as well as go through the different scenarios that could occur. They will explain all the advantages and disadvantages of buying a home at this time and of the different mortgage types available. If there is something that you are unsure about then you should ask questions until you understand. Buying a home is a big step and it is important that you understand all aspects of the financial side of it.
Some people will be afraid to ask questions for feeling ‘dumb’ for not knowing the answer, but you should never be afraid of looking silly. Finding out the answers is much more important than looking silly and I’m sure the mortgage advisor has had many people ask similar questions. It is their job to know all the answers and all the advantages and disadvantages of property buying and it is their job to explain it to you.
Another mistake that many people make when buying a home is that they take out a mortgage that they can only just afford. They assume that the rates are not likely to increase any higher and hope that they will actually go down so there shouldn’t be a problem. You should never assume that interest rates will not go higher as it is always possible that they will. To take a mortgage that you can only afford on the current rate is taking a gamble on your future finances. Sometimes that gamble might pay off and other times it won’t and if it doesn’t then you can be in big financial trouble.
When you apply for a home loan you should always give yourself some breathing space. Your financial advisor should work through this with you and calculate the mortgage repayments in different scenarios if the interest rates were to rise. They should look at your finances and see whether you would still be able to afford the mortgage repayments if the interest rates do rise. Because the future of interest rates can change at any time, it is best to play it safe and only take out a mortgage if you can afford to pay the higher rates. If the rates do drop then you can take advantage of that and pay extra payments off your mortgage.
Buying a property, whether it is to live in yourself or whether it is an investment, is a huge step and a big financial decision. This decision shouldnít be made lightly and you really should seek advice from a mortgage financial advisor before proceeding. Donít put yourself in a position where you could lose your home in the future if interest rates rise, make sure that you can afford the mortgage repayments both now and in the future if the rates do rise. A good financial mortgage advisor will help you to make the right decision for a better financial future.”