How to choose a mortgage loan to buy or refurbish your home?

The bank that maintains our personal account is a natural choice for most people interested in credit. Knowing us, he can offer us favorable conditions for a home loan.

Banks, competing with each other, allow customers to transfer the account and its history so that we will also be treated as regular customers in the new bank!

Loan for home renovation or purchase – differences

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Financing a home renovation is usually a considerable expense. The use of a mortgage for renovation will be characterized by the fact that the bank may require us to provide invoices for the purchase of individual materials and equipment. We will meet this practice at most banks offering mortgage loans.

Documents confirming the purchase of building materials are a kind of loan collateral and oblige the borrower to allocate funds for the purpose set out in the loan agreement. Failure to do so maybe the reason for the bank to demand additional repayment security or even to terminate the contract.

Additional conditions, i.e. what can be hidden under the star?

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Most promotional offers have been constructed in such a way as to encourage potentially interested parties in using a given loan offer on the one hand, and on the other hand that the bank, as a result of providing the promotional offer, does not reduce its revenues much.

Thus, to take advantage of the promotion – for example, “0% promotion” you must have a personal account and payment card in a given bank, take insurance recommended by the bank or use the personal account package and at the same time buy a credit card.

What loan period?

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Choosing the length of the loan period, in other words, at what time we intend to pay off our liability, remember two things – first, a longer loan period is, on the one hand, a lower monthly installment, but on the other, a longer repayment period is associated with higher interest, i.e. more we will pay the bank for using the loan.

Equal or decreasing installments?

Most customers choose equal installments for two reasons. First, customers value the fact that the monthly installment will be at a uniform level.

It should be remembered that by opting for an alternative solution, i.e. decreasing installments, we will pay less interest on our loan! How it’s possible? Well, installments in the first repayment period will be higher – but at the end of the loan period, we will pay interest on the smaller amount of outstanding capital in return.

Foreign currency or USD loan?

The golden rule is to take credit in the currency in which we earn income – this rule is also guided by prudential recommendations addressed by the Good Finance to banks.

Compare offers – it’s free and you can gain a lot

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Comparing mortgage loans is nowadays nothing complicated. It is enough to know the basic data on the expected parameters of the loan (loan amount, repayment period, currency, etc.) and to know the basic data on the income obtained (since what time we have been employed, the amount of average income, etc.), the basic information about the liabilities (limits on cards credit, cash loans, etc.).

Being equipped with such an arsenal of knowledge, we will certainly receive information on the loan offer we can count on in the given institution.

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