After verifying our creditworthiness, we can review the banks’ loan offers to select the most suitable for our current situation and needs. For starters, we need to determine the amount we need and estimate what the total cost of our loan will be. For the รีไฟแนนซ์บ้าน this is the options also.
How much will we pay for a mortgage?
Regardless of the conditions proposed by the bank, we can gain a lot by deciding on a mortgage. How to choose the best offer? Taking credit we are mainly interested in the monthly installment that we will pay back. Before making a credit decision, however, it is worth calculating how much the total cost of a housing loan will be. The main elements to consider are: margin, commission, insurance and property valuation.
Mortgage loan: equal or decreasing installments?
The monthly installment is affected by the interest rate on the loan, which consists of two components: a fixed margin for the bank and a variable base rate. The bank’s margin is fixed throughout the loan period, the only base rate is variable, which is updated every 3, 6 or 12 months.
Banks offer us the repayment of a housing loan in equal or decreasing installments. An equal installment remains at the same level throughout the loan repayment period, it only changes if the interest rate changes. At the beginning, most of the installment is primarily interest, and less is capital. At the end of repayment, the installment consists mainly of capital itself. However, when choosing a decreasing installment, the amount of principal repaid is immutable, and the amount of interest decreases over time as it is accrued on the outstanding capital. In this case, at the beginning installments are higher than equal installments, but as time passes they decrease.
Although it is assumed that the cheapest mortgage is the one in which installments decrease, one should not forget about its own comfort and financial possibilities. Remember that a home loan is a commitment that we will pay back for a dozen or even several dozen years. The unchanged amount of installments allows us to better plan the home budget, which in the case of decreasing installments can be troublesome, especially in the initial repayment period.
What loan period?
The repayment period is one of the most important parameters that should be taken into account when deciding on a mortgage. How do you choose a loan period to pay off your liability without worrying about excessive costs? Both a longer and shorter repayment period gives us some benefits depending on our situation. On the one hand, a longer loan period means a lower monthly installment for us, as the loan amount is spread over a longer period. In addition, it increases our creditworthiness.
On the other hand, a longer repayment period is associated with higher interest rates, i.e., in general, we will give the bank more. If we decide on a longer repayment, it is worth choosing a bank that gives the possibility of early repayment of the loan. Then we will not charge our loan with a low installment, and when our financial situation improves, we will be able to make early repayment of the housing loan.