| Buying a house can often be a difficult process. | | | | you can regularly pay off lump sums into your |
| Decide the location and cost of the house you wish to | | | | mortgage account throughout the life of the loan. This |
| buy. Assess how much of a down payment you can | | | | reduces both interest and capital. Prepayment, |
| make. Compare the various interest options available | | | | however, may attract a penalty. In the case of death |
| by obtaining quotes from a number of lenders, and | | | | of the borrower, the mortgage would stillhave to be |
| choose the best. The rates are sometimes subject to | | | | paid.In the second type of mortgage, only the interest is |
| frequent fluctuations. Also, there is competition among | | | | paid back regularly, while the loan is repaid at the end |
| lenders. Mortgage calculators can help to work out the | | | | of the term. This can lead to problems if |
| interest burden.Generally, for long-term loans the | | | | adequatefinancial arrangements are not made in |
| interest would be lower than for a short-term loan. For | | | | advance. There are different schemes like |
| a thirty-year mortgage, the total interest paid would be | | | | endowment plan, savings account, pension plan or |
| much morethan the amount borrowed. Resorting to | | | | insurance to provide thefunds to meet the lump sum |
| bi-weekly payments instead of the usual monthly | | | | liability. Study them carefully before opting for |
| payment could reduce the load.Mortgages can be | | | | interest-only mortgages.Understanding all the |
| broadly classified into two types. In repayment | | | | implications of the various types of home mortgages |
| mortgage, both interest and capital are paid over the | | | | can be quite difficult. You should therefore consult a |
| term of the mortgage. Here, the amountborrowed gets | | | | competent financial advisorbefore finalizing a mortgage |
| reduced throughout the period. The advantage is that | | | | that is best suited for you. |