Rookie error to avoid when getting your home loan
In life, there are many times that rookie mistakes are understandable, but when it comes to buying property for sale in Newcastle and getting your first home loan, you may want to avoid bumping your head on this one, as it can prove very costly.
If this is not the first time you are looking at property for sale in Newcastle, then you may be aware of the importance of your home loan interest rate, but for first-time buyers it is essential for you to catch up quickly.
Looking for your first home is an exciting process, and from doing all the viewings to getting approval on your very first home loan, it is really a process to enjoy.
However, when taking on the experience for the first time, you may not realise that even the smallest mistake can prove extremely costly in years to come.
One of the biggest causes of future concerns is down to the interest rate that you get on your loan. Often, bankers will simply glide over this during the application process, without you properly understanding how it will impact you.
To break it down a little, on a home loan of R500k with an interest of 13% (Prime plus 3%), you can expect to pay the bank around R5900 at the end of every month. However, getting that interest rate down by a marginal 2% will see you put R700 back into your pocket every single month. That may not seem like a big deal, but add up that amount monthly for the next 20 years and your saving turns from a few hundred rand, into over R160k in savings.
This cold, hard fact is hard to swallow once you have signed the documents and neglected to look at it. So instead of just rushing through the paperwork, negotiate with your bank and discuss this point.
You could also ask about how increasing your deposit may help improve things. Making this sacrifice now could prove to be a smart decision in years to come.
