Taking out a mortgage is a major life decision and should only be taken after serious consideration. Here are some pros and cons to help you before you take the plunge.
Let’s hear it for the advantages:
- Longer-term mortgages – 30-year mortgages mean although it’s a longer commitment, it can be a more affordable option than before.
- Cost-effective borrowing – The interest rates on a mortgage are generally more attractive than other types of borrowing. Lenders can offer a variety of mortgages such as fixed-rate or discounted deals. It’s possible to find a specific mortgage deal that’s ideal for your circumstances and also make it an affordable option. Nvest Estates will introduce you to the best mortgage handlers.
- Easy to repay – The mortgage loan is repaid on a monthly basis and depending on the interest rate, your monthly repayments may be lower than the rent you would pay.
Facing the No’s head on:
- Debt – By taking out a mortgage, you’re taking on a commitment to pay back a lot of money within a prescribed time frame. Even over 25 years, you’ll be paying a lot more back than you borrowed.
- Various fees – In addition to the interest you pay, there can be a surprising amount of other fees to pay including valuation fees, conveyancing costs and remortgaging fees.
- Fluctuating Interest rate– This could be an advantage, because rates can also decrease, but it could mean you end up paying more than you expected.
- Repossession – You run the risk of repossession of you fault on your payments.If you are unable to keep up the monthly payments on your home, you must speak to your lender as soon as possible. They will be able to find a way to help you, or you run the risk of losing your property.
- The value of your property may decrease as the market fluctuates – You can never know for certain if the value of your property will increase, and you may find that you lose money on the property if you choose to sell at an inopportune time.