If you have heard friends or family members talking about their mortgages than you know that not all mortgages were created equal, and not all are suited to your needs.

As if finding your dream home wasn’t a difficult enough challenge, let alone trying your best to find the best home loan product. However, with various lenders and banks trying to get your business, home loans have become so diverse that finding the right one can often be difficult.

What Do You Need out of a Mortgage?

It’s important that you are aware of all of the options available on the market, and more importantly, know if they suit your needs. To help you get started, Riva Title Company has some information below about some of the most common home loan benefits available.

Redraw Additional Payments

Making additional payments towards your mortgage is a great way to lower the amount of interest you pay. However, it also means that you don’t have access to money you otherwise would. This is where a redraw facility comes in. As an example, if you were to make payments of $1,000 per month over and above your regularly scheduled payments, then each month, the amount of interest you pay. However, with a redraw facility in place, if after six months you need to access cash, you will have $6,000 available in your redraw account. This feature often comes with terms and fees, so be sure to complete your research beforehand to make sure that you will actually benefit from having this as an option. If the math doesn't work out to your benefit, consider whether you really need the option.

Low Document Home Loans

Not everybody is able to provide the documentation required for a home loan, especially when it comes to home buyers who work for themselves, who receive income from investments, or even those managing a new business. Lenders are becoming aware of this trend and offer home loans which don’t require as much documentation as a regular type loan. This can be particular for those just starting out with their employment or business. However, it’s worth noting that these loans come with a higher risk to the lender, and for this reason, they often include fewer loan options and a higher interest rate. Before you sign on the dotted line, make sure you have completed your due diligence, like taking out a policy for title insurance in Miami, FL. Title insurance is the best way to obtain financial protection when it comes to the title of your home. To find out more, speak with a professional at Riva Title Company by calling 786-787-7888.

Interest Types

Fixed Types Fixed Interest Rates are as the name suggests. It means that the interest rate you agree to remains the same for a period. This can be a great benefit if you can lock in a great rate when the market is in your favor, and not have to worry about your repayments rising in line with market conditions. However, this can also work against you if the market moves even more in your favor and your repayments are higher than the market average. Either way, it’s worth noting that lenders aren’t likely to extend this option for the life of the loan, so if it an option you would like, discuss the terms with your lender during your first meeting. Variable Types On contracts, variable interest means that the interest rate you pay depends on the market conditions. This could mean that your rate increases along with the possibility to decrease. A variable interest rate can be great if the market is experiencing a long-term low and your repayment fall in line. However, it only takes small changes in the market for your interest rate to rise.

Extra Repayments

Every homeowner likes to think that they will pay down their mortgage years earlier than the scheduled date, with a range of additional payments. However, what many first-time homebuyers don’t realize is that making extra repayments isn’t a standard portion of a loan and is an option which a lender has to offer. The option to make early repayments differs from a redraw facility in two important aspects;
  • You will likely be charged a fee per additional repayment.
  • There is no access to the additional repayments you make.
If you want to avoid being charged a fee, look for a lender which offers this option as part of the loan package. However, be sure to read the terms carefully as allowing additional repayments lowers the income of your lender.

Don’t Forget Title Insurance in Miami, FL

Once you have found the right home loan and the perfect home, don’t let the excitement make you forget about important due diligence items, like title insurance. Title insurance in Miami, FL provides homeowners with financial protection in the event that a claim is made against the ownership of their home and its title. To find out more and to learn how title insurance in Miami, FL can protect you, speak with an expert at Riva Title Company by calling 786-787-7888 before you sign your settlement paperwork.