Most, if not all, people have once envisioned their dream homes while they were still young or when they received their very first paycheck. Unfortunately, with the soaring prices of houses in the market, buying your dream house seemed far from becoming a reality. This leaves many wondering if they should settle with renting a house or securing a home loan. Which one should you choose?
If you've ever wondered how and when you can purchase that dreamy yellow house you've been eyeing on a real estate website for so long, you may have entertained the thought of applying for a home loan. Realty Times said that home loans are becoming a popular choice among homebuyers, as saving for your dream house every paycheck does not seem to be enough.
The publication then suggested on looking for various home loan offers from different banks and financial institutions in order to get the best deal with the lowest interest rate possible. Michael Bluejay also offered a detailed explanation on how home loans or mortgages work and how one percent in interest rates can make so much difference.
The publication also offered explanations about the 15-year and 30-year terms being offered by various institutions and the pros and cons of each. A 15-year term works best for those who wish to save on the interest and pay off the loan in a shorter amount of time while the 30-year term best suits those individuals who want lower monthly payments.
The outlet also provided detailed examples about how much you shell out with different interest rates. According to the outlet, for a $125,000 loan for a period of 30 years, one can incur as high as $144,798 total interest for a 6 percent rate during the said period. At 10 percent rate, one pays out a total of $269,907 on interest alone.
Does this mean you should not get a home loan? Not necessarily. If by all means, this loan will help you provide a house for you and your family to live in for years, then go ahead. However, be sure to look at different options and try to get the best deal when finding a home loan.
