1. What goes up, must come down
Interest rates tend to move in cycles. After a prolonged increase, a slow drop usually occurs. Savvy shoppers should keep track of longer-term trends and wait to buy until rates decline.
3. Natural disaster
Early preparation reduces financial loss from tropical storm, tornadoes, floods, wildfires and other natural disasters. Insurance, home improvement loans to fortify against major damage, and safeguarded paperwork help sustain homeowners and business through disasters.
3. 40-year mortgages
The 40-year mortgage reduces monthly payments if you need more help purchasing a home. But it also has major drawbacks -- a radically higher interest bill over the life of the loan and a much longer time to build up equity. Also, these longer amortizations don’t come free. For example, on a purchase with 5% down payment, you can expect to pay an insurance premium of 3.35% on the mortgage amount to set your mortgage up with a 40 year amortization.
4. When you assume, you can save
Assuming an existing loan can slash your monthly loan payments and save thousands of dollars in interest if the interest rate on the assumable loan is lower than current rates.
5. Be honest
Tell your broker about any strange purchase conditions you meet or about any unusual circumstances in your situation when you apply for your loan. Sometimes what you put on the application doesn't tell the whole story. You may get pre-qualified based solely on a cursory credit check and review of your application data. This could prove to be insufficient for a final approval.
Happy house hunting,
David Shieh
Posted by David Shieh- Abbotsford Real Estate Agent
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