Your home loan interest rate deserves attention
No matter whether you are looking at property for sale in Umhlanga for investment purposes, or as your new home, we take a look at how the interest rate of your home loan could affect you going forward. This can often be overlooked, but that would be a big mistake.
Choosing to secure property for sale in Umhlanga is a smart move, whether for investment or to enjoy the incredible coastal lifestyle, but before you start packing your boxes, you may want to take a look at the paperwork.
First-time buyers, or even those who have been through the process before, may not fully understand the importance of getting a good interest rate, and simply overlook the fact that it is a formality in the process.
However, this is certainly not the case and your interest rate on your home loan will have a direct impact on the monthly repayment as well as the overall cost of your loan.
To simplify this, take a look at a R500k home loan with an interest rate of 13%. You would be paying around R5900 every month for the 20 year duration of the loan. If you managed to get a reduction of just 2% on this rate, you would find yourself paying around R700 less every month, and over the full term of your loan you would save well over R150 000.
This highlights just how important it is that you put some focus on the interest rate, and there are a few things that you could do to help influence what it is.
Your credit score will have a bearing on the interest rate that you are given, so try and get into the habit of checking your free credit report every year. This allows you to pick up on negative trends and work on changing things going forward.
You should also attempt to negotiate with the bank, as they may be open to striking a deal that works for both parties.
Lastly, you could increase the deposit that you put down as this can definitely impact your interest rate while also decreasing your repayment from the onset.
