When it comes to buying a house for yourself, few people can buy it outright unless they’re millionaires. Therefore most buyers will inevitable take out a mortgage when purchasing a house to cover the rest of its payment. But should you go for a mortgage broker that has a set percent you pay back or one with a changing percent? We explore this in more detail.
What is a fixed rater mortgage?
A fixed rate mortgage is where you and your mortgage broker agree on a fixed rate you will pay back over a set period of time. An example of this would be paying back of your total mortgage over a course of 5 years. If your mortgage value is $200,000, you would be paying $3,333 per month. The peculiar thing with a fixed rate is that with this kind of mortgage, you are paying off both the interest from the mortgage loan and your debt, so after the fixed time period (e.g. 5 years) you don’t owe anything to your mortgage broker. There is usually a special rate that incentivizes customers. However, if you try to opt out early, you will have to pay a heavy fine, which effectively locks a customer in for a committed payment.
What is a variable mortgage?
A variable mortgage is where you pay according to the US economy and how healthy it is. If the economy is looking profitable, your interest rate will go up to encourage quicker payments to your mortgage. However in times where the economy is looking pear shaped, you will see lower interest rates in encourage more spending. A variable mortgage is better for those who are already experienced with buying a mortgage loan rather than a new buyer as they will have the knowhow about what to look for. Many mortgage brokers may provide what is known as a standard variable rate mortgage with an introductory offer. The introductory offer will be a lower percentage with some kind of financial incentive, and the standard variable rate will kick in after the introductory period ends.
Where can you take a mortgage out in Melbourne?
With so many mortgage brokers these days, where can you go for good, solid advice? We recommend these mortgage brokers in Melbourne. Mortgage Broker 247 in Melbourne have experienced mortgage brokers who are experts in loan negotiations. Another mortgage broker is Mortgage Broker Melbourne who have had many positive online review, a 4.8 star rating out of 5.
Conclusion
When it comes to choosing something as important as your mortgage, you need to choose the right one for you depending on your payment habits and how healthy your finances are looking. If you’re a new time buyer, and prefer a smaller interest rate, a fixed rate mortgage with a long time period is best advised. If you’re already experienced and prefer to pay it off quickly, a shorter repayment period is better. If you’re happy to pay according to the market value is, get a mortgage broker to sell you the best variable rate mortgage. For detail: mortgagebroker247.com.au
