Bank mortgage or home loan terms can be confusing for first-time borrowers. This blog post will aim to simplify some of the most common finance terms. In this post, we will focus on mortgage and home loan terminology. We will define key terms and explain their function in the mortgage process. By the end of this post, you should have a basic understanding of how home loans work!
If you're ready to start shopping for a home, it's important to understand the mortgage process. Use this guide as a resource to help you navigate the world of home loans! With a little bit of knowledge, you'll be on your way to homeownership in no time.
Mortgage: A mortgage is a loan that is used to purchase a property. The borrower makes monthly payments to the lender, and the loan is typically paid off over a period of 15-30 years. The lender or the bank keeps the mortgage or the ownership of the property against which the loan has been taken until the loan is repaid with interest agreed upon.
Property Loan: A property loan is a type of mortgage that is specifically used to finance the purchase of a home, apartment or land. Home loans usually have lower interest rates than other types of loans, and they often offer special benefits like income tax relief, forced long term savings and others.
Loan Term: The loan term is the length of time that you have to repay your mortgage. Loan terms can be as short as 15 years or as long as 30 years, and they will typically be determined by your financial situation and goals.
Interest Rate: The interest rate is the amount of money that you will pay in interest on your loan. Interest rates can vary depending on the type of loan, your credit score, and the current market conditions. Current interest rates of home loans vary between 7.75% to 8.5% for individual borrwers.
Down Payment: The down payment is the upfront payment that you make when you purchase a home. Down payments are typically between 5 and 20 percent of the property purchase price.
Now that we've defined some key terms, let's talk about how mortgages work! Mortgages are typically paid off over a period of 15-30 years. The interest rate will determine how much you pay in interest over the life of the loan. Your monthly payment will be determined by your loan amount, interest rate, and loan term. At www.TestMyLoan.ai we help you find the best deals on your current and new home loans. Since rates of interest fluctuate all the time, you can maximise your savings on home loan repayments by checking your current home loan at www.testmyloan.ai or even find out how much top-up loan you are eligible for on the balance transfer of your current loan to another lender.
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