While getting anything under prime interest on your
home loan is great, don’t let the fine print turn a good deal bad. Many financiers or credit providers advertise great interest rates to get you interested in their deal but earn their money back with unending hidden costs.
Some credit providers offer great home loan interest rates but then require that you take out life cover and home
insurance through them at ridiculous rates. The insurance Ombudsman though, has ruled it impermissible to force clients to take out insurance through their creditor. According to a recent ruling, owners of a financed home can take out insurance with any provider they choose, making it possible to shop around for a better deal.
Many creditors also ask whether you would like your interest rate to be fixed or not. This is a gamble as interest ra
tes could drop as much as they could increase and more often than not, creditors charge you for un-fixing your interest rate. Most people find it safe to say no, but if you’re applying for a loan at a good interest rate, then it could be safer to say yes.
When applying for a home loan make sure that your repayments are never more than 30 percent of your net income. If it is more, then make extra payments into your
bond to bring down the total of the repayments, if your creditor does not penalise you for this.