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All you need to know about mortgages Full view

When you’re ready to buy a home, it is not just about the aesthetics of the location and the home; it is also about how the process affects you on a monthly basis. This brings us to a big word we all call MORTGAGES.

The only way to ensure you have the best-suited mortgage plan for yourself is to arm yourself with sufficient information beforehand. This article will provide you enough tips to ensure you are able to do so.

Firstly, the most important question you should ask yourself is: how much can I afford and how much can I borrow? The percentage of down payment you pay at the beginning will affect the amount of monthly mortgage payments you pay later on. If you can afford to pay a higher down payment then you will be borrowing less and therefore paying a lower mortgage payment every month.

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When determining how much you can afford to pay for your home, you must consider your down payment amount, monthly expenses, credit rating, and income. As a general rule of thumb, your collective monthly debt should not exceed a third of your monthly income. This debt includes any car payments, education loans or any other costs you have on a monthly basis. Working out your collective debt plan will help decide a ceiling price for the amount of mortgage you are able to afford. You are not ready to look at property until you are able to calculate the amount of mortgage you can afford for your home.

Determining how much you can borrow will depend on the value of your property, your income and your repayment capability. When shopping for a loan, you must consider the interest rate and the duration of the loan. The higher the interest rate, the more money you will pay each month. Interest rates can be fixed or adjustable. Adjustable interest rates change overtime whereas fixed interest rates remain the same.

When choosing your source of finance, you have the choice of choosing between conventional financing and Islamic financing. Under conventional financing, your loan consists of a principal amount plus the interest charged on you. Islamic financing works on a different concept of buying and selling where the financial institution purchases the property and then sells it to you higher than the purchased price. 

When choosing your mode of financing, it is important that you not overlook tiny details such as the margin of finance, lock-in period, and even simple items like making sure a branch is within your vicinity. It is also important that you keep in mind all the other fees involved in purchasing a home. It is obviously not just going to cost you the down payment and the subsequent mortgages. Other fees such as the legal fee, insurance fee, transaction fee etc. are also involved which you will need to calculate in as well.

In general, most mortgages are calculated for either 15 years or 30 years. A 30-year mortgage involves a lower monthly payment than a 15-year mortgage for the same amount, but the total amount paid in interest will be greater. The following reference can be used when calculating the best mortgage rates: https://www.imoney.my/home-loan.

When choosing your mortgage plan it is important that you design a plan that meets you and your needs best and is carried out with the least amount of financial strain.

 

References:

  1. http://www.mortgagecalculator.net/buyers-guide/
  2. http://www.iproperty.com.my/financing/faqs.aspx#22
  3. http://www.iproperty.com.my/news/8992/5-common-home-loan-mistakes-to-avoid
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×

All you need to know about mortgages Full view

When you’re ready to buy a home, it is not just about the aesthetics of the location and the home; it is also about how the process affects you on a monthly basis. This brings us to a big word we all call MORTGAGES.

The only way to ensure you have the best-suited mortgage plan for yourself is to arm yourself with sufficient information beforehand. This article will provide you enough tips to ensure you are able to do so.

Firstly, the most important question you should ask yourself is: how much can I afford and how much can I borrow? The percentage of down payment you pay at the beginning will affect the amount of monthly mortgage payments you pay later on. If you can afford to pay a higher down payment then you will be borrowing less and therefore paying a lower mortgage payment every month.

undefined

When determining how much you can afford to pay for your home, you must consider your down payment amount, monthly expenses, credit rating, and income. As a general rule of thumb, your collective monthly debt should not exceed a third of your monthly income. This debt includes any car payments, education loans or any other costs you have on a monthly basis. Working out your collective debt plan will help decide a ceiling price for the amount of mortgage you are able to afford. You are not ready to look at property until you are able to calculate the amount of mortgage you can afford for your home.

Determining how much you can borrow will depend on the value of your property, your income and your repayment capability. When shopping for a loan, you must consider the interest rate and the duration of the loan. The higher the interest rate, the more money you will pay each month. Interest rates can be fixed or adjustable. Adjustable interest rates change overtime whereas fixed interest rates remain the same.

When choosing your source of finance, you have the choice of choosing between conventional financing and Islamic financing. Under conventional financing, your loan consists of a principal amount plus the interest charged on you. Islamic financing works on a different concept of buying and selling where the financial institution purchases the property and then sells it to you higher than the purchased price. 

When choosing your mode of financing, it is important that you not overlook tiny details such as the margin of finance, lock-in period, and even simple items like making sure a branch is within your vicinity. It is also important that you keep in mind all the other fees involved in purchasing a home. It is obviously not just going to cost you the down payment and the subsequent mortgages. Other fees such as the legal fee, insurance fee, transaction fee etc. are also involved which you will need to calculate in as well.

In general, most mortgages are calculated for either 15 years or 30 years. A 30-year mortgage involves a lower monthly payment than a 15-year mortgage for the same amount, but the total amount paid in interest will be greater. The following reference can be used when calculating the best mortgage rates: https://www.imoney.my/home-loan.

When choosing your mortgage plan it is important that you design a plan that meets you and your needs best and is carried out with the least amount of financial strain.

 

References:

  1. http://www.mortgagecalculator.net/buyers-guide/
  2. http://www.iproperty.com.my/financing/faqs.aspx#22
  3. http://www.iproperty.com.my/news/8992/5-common-home-loan-mistakes-to-avoid
Back Next