A mortgage is usually a long-term commitment. Therefore it is not something you should take lightly. There are certain things you need to look at, before taking up a mortgage. In today’s article, I will be focusing on three of those things. That is, three key things you need to consider, when taking up a mortgage.
Firstly, when taking up a mortgage, you need to look at the applicable interest rate. You need to know what the typical interest rates for mortgages (in your market) are. Then you need to ensure that what you will be paying is something that makes sense. If you have to pay a higher interest rate, there should be justification for it.
Secondly, when taking up a mortgage, you need to look at the installments you will have to be paying. With respect to these, you need to ensure that they are amounts of money you can afford to pay comfortably. The monthly installment needs to be a figure you can cope with, even if your fortunes change for the worse.
Thirdly, when taking up a mortgage, you need to look at the repayment period you will have to service the mortgage. If, for instance, the repayment period is 20 years, yet you are expecting to retire in 15 years, you can see that there is a likelihood of you encountering problems in the future.
If you are uncomfortable with any of these things, you may need to refrain from taking the mortgage. If, for instance, you feel that the interest rate is too high, you may be better advised to look for a more affordable product. If you feel that you will have problems coping with the required repayment installments, you may need to desist from taking the mortgage. The same would apply, if you are uncomfortable with the period of time you will have to service the mortgage. Remember, if you are unable to service the mortgage for whatever reason, you may have huge financial difficulties in the future.