In addition, foreclosing on a long-term mortgage is more accurate and profitable than contracting a rental home. They both require you to pay some money. The difference is that one will belong to you, and the other will not. From this comparison, it is clear which option will be most beneficial in the long run.
With this long-term mortgage service, you can buy your ideal budget home. Generally, the installment is quite long, which is about 10 to 15 years in installments. Before deciding to apply for a mortgage, there are a few things to know first. It takes a specific strategy to choose a mortgage that works for you. Because you definitely want to choose and expect the best and long-term mortgage program.
As you know, the best time to start a home loan and buy a home is in the productive age range of 21-30 years. This is an ideal age considering there are many opportunities for extra work. If you start at this age, you can also have long-term savings. Thus, you will eventually have the potential to generate a high return on investment value.
Prepare your Financial Condition
Of course, you’ll need to make some financial adjustments when applying for a Long Term Mortgage. The reason is that for a long time you need to be prepared for the financial situation to be cut to finance the mortgage loan. You can do lifestyle and reduce spending to buy things that are consumerism and luxury.
When you are buying and selling a home through a mortgage, make sure that your financial situation is good enough. Also, consider whether you plan on staying permanently in the home you are about to buy.
Estimate how much the funds need to be spent including taxes and other administrative costs. This should be part of your general judgment to address potential hidden costs. Such as additional fees for infrastructure or to complement a shared facility, and so on.
You’ll also want to determine what kind of housing environment you want to buy. Be a visionary and imagine it for the next 10-20 years. Is there any potential investment value for the house in the future?
Save for Home (DP / Down Payment)
Setting up your financial fund’s capacity also means having savings available for use as a down payment (DP / Down Payment) of your home mortgage loan. This needs to be done before you apply for a long-term mortgage with your bank.
It is also advisable to detail your entire budget in detail. The calculations that take only the outline can be misleading. So be careful in this calculation and do it in detail. This includes expenditures that seem trivial but just as important as how much money is left per month after living expenses (eating, transportation and paying for electricity bills, credit, water, etc.).
Also, consider how much money you need to save and how long it will take to complete it before you finally apply for your mortgage. Ideally, the DP money needed to save up to 30% of the total estimated home price.
To make things easier, you can take advantage of savings and investment forms like gold, deposits, stocks or mutual funds. Money that is safe and easy to liquidate can make home DP funds faster because they don’t need to be used for other needs.
So, for those who want to apply for a mortgage, make sure that the type of home, developer, or mortgage sale contract you choose is best for you in the long run. In addition to the above, what other points should be considered? Here’s the description.
Calculate the Interest Rate
Most people are immediately tempted to take the lowest interest rates because they expect the lowest prices. However, you should first know how to calculate the interest rate. Only then can you decide on a mortgage ( annuity, flat, or effective ).
To find out more about how the interest rate system works, you can also request a simulation of the installment table showing how much the installment should pay per month.
Find out if the flowers are floating or a fixed rate. Interest rates (floating) is set based on domestic and international financial markets. As for the fixed interest rate (fix) the interest rate is pegged at a certain level during the credit period.
Financial experts recommend that you choose an effective interest rate. Use it to make your credit score lighter since the mortgage you want to apply is a long-term mortgage.
In addition to interest rates, credit card size is also one of the important things to keep in mind. Find as much information as possible on how much money it takes to select the right bank. Find out how much a loan or loan limit is for a bank. Keep in mind that this is a long-term credit to which you want to contract. To avoid feeling like a burden, you can choose the one that fits your budget best and is comfortable.
Don’t Choose Bank Incorrect
There are some banks that are too fast to raise mortgage rates. They do this to suit the interest rate of BI (Bank Indonesia). However, there are banks that are slower to adjust to the decline in BI rates.
To be financially profitable, choose a bank that better understands its customers’ needs. Thus, not only does the bank require its customers to maintain a mortgage, but it also improves your comfort by adjusting your credit score once the BI interest rate has dropped.
On average, most banks will lend up to a maximum of 15 years. However, there are also some banks that provide tenor up to 20 years such as BTN banks.
If your income is good enough, it is advisable to take a tenor or short term loan of around 5-8 years. If you extend your mortgage term, you can reduce the number of installments you have to pay each month. A long tenor will certainly make your installment smaller. This can also reduce your monthly installment load, even though the consequences for your loan may be longer.
There is a Mortgage Payment Penalty Fee
The mortgage prepayment penalty is the amount you have to pay if you want to pay off the mortgage early. For example, you previously took a ten-year tenure mortgage. But it turns out that in the middle of the process you were able to make some money to pay it off, so by entering the fifth year, you would have paid in full. This is possible but you will be subject to a fine penalty for paying ahead of time.
To be more specific, be aware of this information from the beginning before you apply for a long-term mortgage. Ask how much it would cost if you paid off some of the loans before the tenor expired. Also, know how much the penalty will be if you pay it off completely before the end of the mortgage period.
As such, you will want to find out whether the bank as the mortgage lender allows for partial or complete repayment of the initial payment. You’ll want to choose a bank that won’t charge you if you find that you have more funds and are able to pay off in advance.
Know the duration of the Submission Process
The length of the application process is also important to know. Generally, the mortgage application process will take two weeks to a month. To avoid taking too much time, you should first ask about how long your mortgage application process will take. Choose a bank with a faster processor so that your mortgage application does not interfere with the convenience of your activity.