Many people just get mortgages without considering what kind of mortgage to get. The choice which exact mortgage to choose seems to be trivial to many people. They are bored by financial details and don’t want to spend any time on choosing the type of loan they take. They just take the first deal that is offered to them and often don’t even notice that they could save thousands of dollars if they just sat down for some hours and did some research before they decided which mortgage deal to go with.
This is very understandable, there are so many types of mortgage deals that it is very hard for a beginner to get into the topic. There are fixed rate mortgages and flexible mortgages, the shared ownership mortgage, the tracker mortgage, the reverse mortgage, the list goes on and on. Many people get disturbed by all those terms and give up soon. Some people try to hand off the decision to a financial advisor. While this is probably a lot better than doing nothing, it still isn’t optimal. Many financial advisors are payed a commission-based salary, so it is in their interest that you get the loans that earn them the most money, not the ones that save you the most.
The only solution to this dilemma is either to find someone you really trust and who knows a lot about finance-related topics, or to put in the work yourself. Ask for the exact rate you have to pay, look for every detail and explore different kinds of mortgages. How does a shared ownership mortgage work? What is a tracker mortgage? Get the concept of a reverse mortgage explained until you really understand it.
It probably won’t be fun do research all this, but it will definitely pay off.Just one tenth of a percent may save you thousands of dollars over the next few years.
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