Don’t overlook your home loan interest rate
Starting your search for property for sale in the Vaal is exciting, but before you get caught up in the moment, you need to take a step back and focus on some important matters. Arguably one of the most important factors is the interest rate, and this is how you can approach it.
When you start searching property for sale in the Vaal, the excitement of finding the right place can take over and sees many buyers lose track of some of the finer details.
In recent years, securing a home loan has also been more difficult, which means that when you get the news of a successful application, it’s easy to simply celebrate the fact that you will soon be enjoying your new home.
However, instead of following this path, it may be a good idea to step back, take a breath and look at some of the more important factors of the deal. Arguably the most important of these is the interest rate.
This tiny number listed on the contract can heavily affect the repayment of your loan, and understanding this will go a long way in making it an even sweeter deal once you sign on the dotted line.
To make this clearer, saving just 2% interest on Prime plus 3% of a R500 000 home loan would put R700 back in your pocket monthly. It may seem minor, but over the next 20 years, you would save R168 000 in interest.
That can be quite a shock and there are three simple things that you could look at doing to help your chances of a better rate.
First, you should check your credit score as early as possible in the process. A bad credit score is likely to leave you with higher interest, and taking steps to fix this could save you a fortune.
Next up, talk to your banker and negotiate for a better rate. Instead of thanking them profusely, just ask the question. You may be surprised at their willingness to negotiate.
Another opportunity to decrease your interest rate comes when putting down your deposit. If you are able to consider a higher deposit, it can make a big difference.
