Anyone who has paid attention to the global interest rates will tell you that this is one of the best times in the last hundred years to obtain a mortgage. The thing to remember with mortgages is that the rates are based off of the rest of the economy. So while you might not know for certain if you are prepared for a home of your own, you should at least take the following into consideration to capitalize on one of the best deals in recent history.
Low Interest Rates
The interest rates of any given bank or lender are going to be based upon the federal rates. If any specific bank tries to charge more than everyone else, then no one will take out a loan with them. So, for the most part, interest rates in general are all pretty close to one another. However, when the federal rates are low for one reason or another, it means that borrowing money is extremely cheap. And when you consider the almost historic lows that are currently happening with interest rates, you are essentially able to borrow money for a mortgage and pay back significantly smaller amounts of interest.
The thing to keep in mind here is that the interest rates cannot stay this low forever. They are still experiencing a lull due to the recession, but each and every day the chance that they will balloon back up becomes greater. If you want to capitalize on these low rates, then you need to investigate a housing loan with PropertyGuru Singapore today and see what you can qualify for.
Questionable Global Economy
When you look at the economy in general, it should start to make sense how things flow together. On the one hand the economy isn’t as bad as it was almost ten years ago. And on the other hand, you need to recall that there are still many signs and signals that say the global economy is in some trouble or at least that things aren’t moving as fast as they should be.
The ability to capitalize on this is what makes any financially savvy investor stand out from the rest of the crowd. When prices are low is when you are supposed to buy in the stock market, but the same strategy holds true everywhere else including the real estate market. If there isn’t a strong economy, then this is the perfect time to buy a home. Prices will be low, home construction workers will jump at the chance for your business (whether building or remodeling), and you can get a lot more for your dollar just because people are more desperate to earn an income and a living. You can help others while also helping yourself and you can do it for a cheaper price than normal if you buy your home today.
Need to Start Sometime
The general idea with most mortgages is that you need to pay on them for thirty years. Many people will take out a mortgage for less time, but when you consider that you can get more of a house if you spread it over thirty years then you put yourself in a more advantageous position.
However, there are some people who incorrectly reason that they can simply wait and start the mortgage “in a few more years.” The problem with this line of thinking is that you still need to make thirty years of payments. If you started today, then you are down to twenty-nine years and eleven months whereas if you wait five more years then you won’t be done paying for the home for the same period of time plus another five years. In short, delaying a mortgage now means a longer wait until it is paid off.
Thinking About the Future
Think about the future and where you could be and you can easily see why it is so important to plan for your future with a mortgage today. Once you start making payments on your mortgage then you are putting away money and converting it into equity. That equity is essentially yours to keep and do with as you see fit. For many people the value of equity can mean flexibility as they can always borrow against it if they have an emergency.
Another thing is when you go to sell the house, you keep the equity to yourself. That being said, it can take years to build up equity within a home, so you literally have to start paying off a mortgage now in order to be able to see anything substantial in a few years down the line.
As you can see, a mortgage is a fairly significant purchase and it might even end up being the most expensive and the largest thing you will ever buy. However, instead of just treating it like a purchase you also need to be sure you know how to use it to your advantage. The financial landscape is already set in your favor, and there is no better time than the present to get started preparing your future. That is the exact reason why many people who would otherwise not want to own a home are looking to purchase today just so they can take advantage of the overall deal that they can get in the current economic climate.
Contributed by Spencer Josan, a finance enthusiast located in Hoboken, Hudson County in New Jersey.