Home Loan

[Kaycee Griffeth]

Hi everyone!  My husband and I are talking about loaning our own home.  You see, we have been renting for quite some time now and we feel it's time to have our very own.  We have inquired from our bank but interest rate is a bit high.  We are looking for options other than banks.  Any suggestions? Oh BTW,  fixed rate sounds good.  Thanks!

[eye_of_tiger]

Kaycee,

You failed to mention in which country you live, as any advice of this nature would necessarily need to be specifically tailored to your national economy.

Unfortunately we cannot according to international law as well as the site rules on such matters offer you specific financial and home loan advice, or give free advertising for a particular loan offer or credit agency.

Generally however banks usually provide some of the best rates available in the current financial market.

There are always building societies (depending where you live) as well as private loan companies, but these are often for people who are bad credit risks and appropriately the interest rates charged are much higher than those of the banks.

If you are already an established bank customer with a good saving and credit rating under your belt,  then you may be able to negotiate a special rate offer only available to good credit risks like yourselves.

If you can manage to pay off your mortgage every two weeks instead of once a month, then you can potentially save yourselves tens of thousands of dollars/pounds/? over the term of the loan.

And while interest rates are important in calculating whether you can successfully service your home loan plus leave yourself a buffer in case or when the rates inevitably begin to rise (if you do not choose the fixed rate option) or something unexpected comes up, watch out for any hidden fees and charges,  including any exit fees for paying off your loan ahead of time.

What are the administration charges? Do they also provide income insurance, just in case for some unpredicted reason one or both of you cannot work for a few months? Making such a major potentially life changing decision based exclusively upon the nominated interest rate is a recipe for disaster. The older you both are, usually the less is your capacity to compensate for any nasty financial shocks or sudden upward movements in the money markets, well into the future.

Once again depending upon where you live, there are many free home loan comparison sites springing up like weeds on the internet, where you can plug in all your personal data, and get an idea as to which of the loans offers you the best value for your money.

Once you think that you have found what you and your husband want, follow the link to that financial institution to more fully explore the terms and conditions of that loan offer, BEFORE committing a large slice of your combined household income to your mortgage repayments for the next X years.

Achieving anything in life which is important to you (and your husband) unavoidably involves you taking certain risks. The secret which should not be a secret at all is to minimize those risks, and to make them as much as possible calculated or planned ones.

Do your homework first. Anything which looks too good to be true usually is. Look below the surface for the full facts of the deal, and do not allow them to force you to make any impulsive or rash decisions on the spot.

If they are having to pressure you into signing your lives away, then immediately suspect that they are not telling you the whole truth.

A good and reliable and solid home loan product sells itself.

All the best to you both with your house hunting. It is a pity that I will not be able to attend your upcoming home warming party.

Enjoy!

Brian  

[Kaycee Griffeth]

Hello, eye_of_tiger!

Sorry about that. My hubby and I are moving to Bay area in SF and we're already looking at some properties.

The real estate agent said that we can borrow from either a bank or a credit union. He also mentioned that we're better off borrowing from a CU "interest wise" but still weighing the pros and cons if we'd go for one.

Our bank offers really competitive mortgage rates but we also wanted to opt for a fixed rate mortgage which is what the CU he recommended was offering san diego mortgage rates are extremely high) so that's currently where we are at this point.

Thank you for taking the time to share your insights on this matter and have actually taken note of each one

I look forward to years of holistic learning on this site's forum boards!

[eye_of_tiger]

Kaycee,

You are very welcome.

There is really no need to apologise for the delay, but thank you anyway.

I do hope that everything works out OK for the both of you, and that you will soon find a suitable property in your price range.

Regards,

Brian  :)