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Mortgage Rate

Worst Mortgage Rate Mistakes To Avoid

We are all humans, and humans are prone to error. It is best (when possible) to learn from the mistakes that others have made in the past. Avoiding repeating those errors helps us grow as people and avoid pain. One area that can be instructional to us all is learning from the mistakes others have made about their mortgage rate.

Not Taking The Fixed-Mortgage Rate Option

There is always a difference between a fixed-rate and a variable-rate mortgage. The variable-rate is always a little lower than the fixed-rate. The fixed-rate stands at a premium as a mortgage rate because of the added security that it provides to a home buyer. That buyer will know exactly how much he or she will be paying on their mortgage in advance. There is in fact a premium value to having that information.

While it may be tempting to go for the lower variable mortgage rate, this is not advisable. The Loans.com.au Mortgage Rate on a variable loan can literally change at any time, and it is almost never in your favor. The variable mortgage rate is simply too big of a gamble on something that is such a cornerstone to a person’s life.

Ignoring Small Difference In Mortgage Rates

What is the difference between paying 2.25% and 2.5% on a mortgage? A huge difference! The two difference between those two numbers is in fact small, but the different in total payments over the life of the mortgage is enormous. Keep in mind that most people borrow their mortgage over a period of decades at a time. The interest difference between those two loans will add up to a surprisingly large amount for the person who does not zero in on even a small difference like this.

Not Putting Enough Money Down

A down payment is a big sign to a lender that the person they are lending to has the ability to repay the loan. The mortgage rate offered to someone who puts money down on the loan is significantly impacted by how much money that person is willing to put down on their loan. Anyone who makes significant strides towards putting down a significant down payment can probably count on receiving a better rate than if they had not done so.
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Buying More House Than One Can Afford

Everyone dreams of having the big house that will impress their friends and family. However, most of us cannot afford that dream house right off the bat. Purchasing more house than one can really afford is one of the most common mistakes people make relating to their mortgage. Avoid this by checking your ego and trying to tamp down how high you set your sights.

People sometimes get “home fever” and just want to become a homeowner. It is noble goal to have, but it is not something that a person should just rush into. There are so many ways to get oneself financial tangled up trying to do so. It is not worth the risk and the value to paying attention to details of one’s mortgage rate is essential to a happy financial life.

Mortgage Calculator

What Is The Value Of Using A Mortgage Calculator?

What is the purpose in pulling out a mortgage calculator to figure out something? Aren’t those just tools for the overly nerdy? Actually, the answer to that is no. In fact, a mortgage calculator may be one of the most powerful free tools that a person can use in their financial life.

The Most Expensive Purchase

Although many of us like to splurge from time to time on a purchase that we really probably shouldn’t, the fact remains that our house is something that we will inevitably spend the most money on. It is the single most expensive purchase that the vast majority of the public will ever make. As such, it deserves very careful attention and dedication to detail. The type of person who has a happy and healthy financial life is also the type of person who pays attention to how they are spending their money.

The Value A Mortgage Calculator

Loans.com.au Mortgage Calculator has the function of showing a home buyer (or refinance prospect) what the payments may look like under a variety of potential mortgage conditions. It helps to estimate the size of payments that a person may have to make on their mortgage.

The value of a mortgage calculator is in its ability to help someone plan out their future a little more accurately. Planning ahead is always a virtue, but it is a particularly prudent thing to do when someone is trying to purchase a home.

Plugging In Variables

No one can know with absolute certainty what mortgage rates will look like in the future. A mortgage calculator will bring you no closer to knowing what rates are going to be in the future. However, it will help you to plan on how much you will need to save under a variety of conditions. It will show you that you are either saving enough, or perhaps that you need to kick things up a few notches. Either way, at least you will know what is going on.

There are some variables to consider when using a mortgage calculator. These are the factors that you will either need to outright know, or at least have some reasonable estimation of. A few of these factors are as follows:

  • Term Of The Mortgage
  • Estimated Interest Rate
  • Down Payment Amount

With just these three variables plugged in, the mortgage calculator can churn out a number that will give you a ballpark idea of how much your mortgage will be.
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Is It Time To Re-finance?

There is always a question in the minds of those who are contemplating re-financing their home. They want to know if now is the time to go through the trouble of doing so. It is a fair question. No one wants to slog through the re-financing process if they are not going to gain much from doing so financially.

The mortgage calculator helps in this realm as well. It shows what the payment will be if a person re-finances at a different rate. If that number is significantly lower, it may be time to consider re-financing.