It remains interesting to take out a housing loan. But how do you get the lowest rate? Until today we are flocking to private lenders to take out a housing loan. And that has not escaped the attention of internet players. See http://www.distinctive-works.com/bad-credit-payday-loan-get-the-cheap-payday-loan-for-bad-credit-when-you-need/ for the scoop
For example, the internet private lender recently launched a housing loan that is directly in competition with the other price breakers. But an earlier report from our site shows that with such housing loans you have to pay attention to a number of things. For example, private lenders work with fixed rates that only fall if you meet certain conditions.
That while other private lenders are willing to offer you a tailor-made rate. But how can you be sure that you will receive the lowest interest rate?
Visit several private lenders
The golden rule is: visit private lenders as much as possible. Anyone who ends his search for a home loan with the first private lender loses his chances that he can decorate a cheaper rate elsewhere. Private lenders are willing to cut interest if you come up with a proposal from a competitor.
For example, there are still customers who take out a 20-year loan at an interest below 2 percent. That while the majority of the private lenders advertise a rate of around 2.6 percent. You can consult all the rates on our site.
Private lenders are also willing to significantly lower the price tag of your home loan if you subscribe to a number of by-products such as fire insurance. But the reality is sometimes less rosy. Some private lenders use such conditions to, for example, sell you a more expensive fire insurance policy.
That is why, since April, lenders are required to include all costs of a home loan at an annual percentage rate of charge.
That measure should make it easier for consumers to compare private lenders. The cost percentage also takes into account, among other things, the commission for intermediaries, the file costs and also the registration and mortgage rights on the credit.
Interest does not say everything
Also, don’t be blinded by the interest. A percentage of 1.8 percent in 20 years may look nicer than a percentage of 2 percent in 25 years, but that means that you have to pay more every month. For example, anyone who borrows 100,000 dollars from private lenders for a 20-year housing loan pays 2.65 percent interest or 535 dollars per month.
Whoever borrows the same amount in 25 years pays interest of 2.88 percent or 464 dollars per month.
That is 71 dollars less per month than if you pay the same amount in 20 years. On the other hand, you pay 5 years longer and pay more interest. That is why it is also important to check whether the monthly payment fits within your (monthly) budget.
Choose the correct formula
Finally, it is important to choose the right formula. With the lion’s share of the private lender, you can opt for a variable or fixed interest rate. While a fixed interest rate is clicked for the entire duration of your contract, a variable interest rate is adjusted at fixed times (depending on your contract). For example, in times of low-interest rates, it may be more interesting to choose a fixed interest rate. After all, there is a good chance that interest rates will rise in the future.
But keep in mind that the variable interest can double as much as possible. If the variable interest rate is low enough, it may in some cases be more interesting than a fixed rate in a lower interest rate environment.