Archive for July 2018

Understanding the Mortgage Options Perfectly

Today I want to talk about one of a kind of conditionally good loan – a mortgage.Loans are “good” and “bad.” In more detail, what is it, you can see below the video, where I tell about “bad” and “good” loans.I personally consider a mortgage as a good loan if you follow the rules below.

Mortgage will allow you to become the owner of your home and fix the cost of the notorious square meter. This is especially true when the rise in property prices seriously outstrips the growth rate of your income. The role of the mortgage broker GeelongĀ happens to be important.

Golden rules of borrowing

Engage in the currency in which you earn

This is the “golden rule” of any loans. If you earn in rubles, then borrow only in rubles.

To service a loan in foreign currency it will be necessary to purchase the currency from its ruble earnings. Accordingly, if the exchange rate rises, your payments in rubles will grow automatically.

At one time I personally “badly” flew in on the foreign currency loan of my car, having overpaid in the end more than hundreds of thousands of rubles. But it was a relatively small loan, and I was able to convert it into a ruble loan, in the case of mortgages during a crisis in the economy it is hardly possible. The crisis of 2008-2009 has knocked down many currency borrowers.

Take it in moderation

Monthly payments should not exceed 30% of family income – a generally accepted rule, 50% is already a critical threshold. In Russia this rule practically does not work. Russians bravely shoulder the debt burden and in 70% of the budget.

As a rule, this ends pitifully. Any abnormal situation with expenses and incomes is covered by non-payments, hassle, communication with collectors, payment of fines penalties, entering a “bad mark” in the bureau of credit history, etc.

You just cannot imagine how many people turn to me for help. Like, what to do in this situation? Well, if there is still somewhere to live, you can sell the apartment (usually it is more expensive than buying and more loan amount). But many people start the situation so much, and it’s hard to advise something, and people are already under severe stress, they lose their adequacy.

Improve living conditions in stages.

It would be more reasonable to move to a two-room apartment first. Having paid off successfully a mortgage, having earned a positive credit history, get a new loan, on more favorable terms.Moreover, it is possible that the conditions of these loans will improve by the time of registration of a new mortgage.

In this case, you will not be on your own to drag the notorious “mortgage for half a century.” With the current mortgage rates, every 7-10 years you will only pay interest on the cost of another similar apartment that you purchased. Do you really want this?

Be sure to study the terms of the contract

Pay special attention to all additional costs.They are able to “pour” into an annual few percent of the loan amount (in addition to the interest rate).Such inflated payments can easily lead you to a difficult situation. This can be, for example, life insurance of a borrower and an apartment in favor of the Bank in a strictly defined insurance company. In the contract for betting, there can be nothing. But if you pay a visit to the insurance, you can find out, for example, that the cost of insurance costs 0.5-2% of the amount of the contract together with interest (!) And you have to pay for it naturally every year.

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