Kinds of Home Loans

Many lenders offer specially designed home loan packages to suit the individual requirements of the mortgagees.

Whatever type of home loan you chose to take, be sure to read the loan agreement carefully and be aware of all terms, conditions, exclusions, and provisos.

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Interest Only

These home loans offer you the choice of repaying only the interest on the loan during the term of the loan. The principal can be paid off in a lump sum at the end of the term. This leaves you a lot of loose change for other things. However the sword of repayment at the end of the term is left dangling on your head.

No Deposit

Most home loans require you to pay 5 to 10% of the cost while taking the rest as loan. Under no deposit home loans, you can take 100% of the cost as loan. These loans offer more cash but the repayment liability is also higher.

Non Conforming

Some lender institutions offer loans to people who do not fulfill the criteria set out by banks for home loans. These loans usually carry a higher rate of interest.

Ensuring Your Home Loan

Start saving well in advance so that you can set aside enough to be able to pay the minimum required deposit against your loan. Most lenders require that you put up about 5 to 10% of the total price of the home while the balance is given as a loan.

Get Mortgage Insurance

Get a mortgage insurance. This will reassure the lender that in the event you are unable to pay off the loan, the insurance company will pay up. Remember to factor the insurance premium when assessing your financial position.