When it comes to purchasing real estate in Surfers Paradise – or anywhere for that matter – one of the most important things to figure out is what kind of home loan you should try and secure. The main two types – fixed- and variable-rate – both have their own benefits and drawbacks, which can make them perfect for some buyers and terrible for others. It’s all about figuring out what mortgage type is right for you and securing one with a low interest rate.
Moving into the market as a first home buyer, you’ll most likely be heading in blind and without previous experience. Therefore, finding a way to streamline the process and make it as stress-free as possible will be the name of the game. Luckily, looking into a fixed-rate home loan is the perfect option for those buyers seeking more security and stability with their finances.
One of the biggest benefits of taking out a fixed-rate home loan is that it makes budgeting far easier for the homeowner. By knowing exactly how much you need to pay each week, you can forward plan with your income and other expenses – removing any potential for nasty surprises.
Secondly, changing interest rates in the market won’t have any effect on you. Because you took the time to fix your interest rate, you’ll be free from any economic interruptions that might occur across the nation during your repayment period.
However, while fixed-rate home loans are great to those looking for stability, they can restrict borrowers by the same token. For example, if you’re interested in securing some of the facilities that can turn your mortgage into a service that works towards wealth generation, many of these cannot be applied to fixed-rate home loans.
Furthermore, the interest rate can also drop. If you lock in a fixed-rate and then the market drops, you’ll be stuck paying the higher rate, which can be irritating in the long term – especially if you’re locked into a long term mortgage. Finally, while getting away from these home loans is possible, the bank fees are often quite large.
On the other end of the mortgage spectrum you have variable-rate home loans. As the name suggests, these mortgages don’t have a fixed interest rate attached to them and instead work within the whims of the economy and property market. These are often pursued by property investors and people with experience in the market, who are able to cope with potential for repayments to rise as much as they’re willing to make savings on the down periods.
Furthermore, there are a wide range of facilities that can be added to these home loans to help with the wealth generation possible through smart home loan application. When used in conjunction with your property, things like offset accounts, redraw abilities and a wide range of other add-ons that can work with your money to help you in the future.
However, with all this freedom comes the potential for things to get out of control. Taking out a variable-rate home loan means keeping a relatively close eye on the market movements and making sure you safeguard yourself against steep rises and other complications.
There is the potential for things to go asunder, leaving you without an out and a financial headache. Get in contact with a financial expert to discuss your overall financial goals and gain some insight into the type of home loan that works best with your plans.