Your guide to finding the best mortgage deal part 1

Find the best mortgage deals by following the steps listed below.

09:28 15 June 2013

Buying a new house is one of the biggest financial decisions one can ever make in his or her lifetime.  As this is usually a long-term commitment, you need to make sure that you’re getting the best mortgage deal available to you. Here’s how you can do that:

 

• First thing to do is to figure out exactly what you need. Start by determining the amount of down payment you can afford. This will help you figure out later on how much money you need to borrow. Then, look into your finances and sources of income to determine how much monthly payments you can afford over the coming years.

 

• Choose between repayment or interest only. You have the option to sign up for an interest only mortgage. This is a lot cheaper compared to when you’re making monthly repayments, as you only have to pay for interest.

However, with this option, you do not reduce your outstanding balance. In order to pay for that, you’ll need to pay into separate savings account or investment so you can pay the whole amount at the end of the term.

Meanwhile, repayment mortgage means that you make monthly payments that include interest. Doing this helps you gradually pay off the outstanding balance. At the end of the payment term, you’ll own the property.
 
Read the second part of this article for the last 3 steps in finding the best mortgage deal.