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Do you really think you're going to get a good deal for that house you're eyeing? Think again. You might be getting a good price, but if you are planning to have it mortgaged, make sure your purchase savings are not going to evaporate with the high accrued interest costs.
There are lots of available financing options out there to enable you to buy a house or condominium, but they all add interest and other charges which may lead you to actually spend double or even triple its original price. To make the most out of your hard-earned money, know the best way to finance your purchase.
Know which mortgage terms can cost you money and how to protect yourself before you close the deal. You should consider the amortization period, prepayment options, frequency of interest compounding, among others, the report said.
It is best to be able to repay your mortgage loan as quickly as possible so you can save on years of interest payments, too. Study the ways on how best you should do it.
mind also that borrowing rates is only one of the many factors to consider when arranging a loan as tracking rates alone won't teach you enough about how to save and how to protect all your interests when buying a home, the report noted.
To ensure that you are getting the best advice, talk directly to concerned government agencies and consumer associations and do not rely on friends' advice alone or believing everything you read on the Internet. Popular sites, the report said, may sometimes have undisclosed agendas that could even make you more confused about mortgages.
Another way to fully understand mortgages is to learn at least the basic terminology being used by real estate salespeople so you will be comfortable in your journey to understanding what you are getting into.
According to the government's Federal Reserve site. a borrower needs to understand first all that refinancing involves before deciding.
"Your home may be your most valuable financial asset, so you want to be careful when choosing a lender or broker and specific mortgage terms. Remember that, along with the potential benefits to refinancing, there are also costs," it said.