Mortgages: a chain around your neck or the shoulder of a giant?
So you are thinking about cheap mortgages? Haven’t you heard that interest rates are rising? Property prices, too, in the UK, are sky high, and it’s getting difficult, if not impossible for people to purchase their first property. What ways can you use to get yourself on the property ladder less expensively, with less pressure, and less hassle?
1. Save for your deposit. When prices are as high as they are, you should be saving for your deposit. You may be lucky that one day prices start to fall, and suddenly, you’ll be eager and ready to pay up for your house, and include a nice hefty downpayment.
2. When you pay that downpayment, you’ll notice that your equity portion is much larger than the typical 0% on most mortgages (as they are 100% mortgages). Your interest rates should be a little cheaper, AND your monthly payments will be lower, too.
3. Don’t rush into any deals. It’s often more in the interests of the seller to rush a deal through, not in the interests of the buyer. So, dilly dally until you find the perfect house.
4. Deals may be about property, but they always involve people. If you don’t like the people on the other end of the deal, don’t be afraid to drop the deal, providing of course you haven’t signed any paperwork. It’s your money after all.
5. Do look around to compare mortgages. As you buy a property, so you should sign a mortgage, slowly, carefully and thoughtfully. Get the facts, think them over, then focus on the important points. And READ the agreement BEFORE you sign.
6. And, one of the great things about mortgages and inflation, you’ll find that in 20 years when you’re still paying your mortgage that you’ll likely be paying a much smaller portion of your salary than right now towards it. This long term view will help you to realize that the burden will be constant, but in this case inflation is your friend as it increases your salary but eats away at your debt!
So, relax, clear your mind, and think long term. Then you’ll find that mortgage hunting isn’t so stressful when you look at the big picture.
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