5 mistakes that make mortgages unbearable
Get Rich / / December 20, 2019
In the mortgage is not a good reputation. But this is not due to the fact that credit for housing - an absolute evil. Often bank customers create their own intolerable conditions.
1. Select uncomfortable payment
Take out a mortgage with a maximum mandatory payment seems logical: less than the loan term - less overpayment. Of course, will have to tighten their belt and some what limit itself in the coming years, but the savings is worth it, you think.
But life consists not only of numbers, and you are not a robot. With long-term mortgage can happen anywhere: you fired, You have a child is born, you have to keep an elderly parent and costs increase. Finally, do not discount the fatigue of austerity - this is a serious psychological burden. You will be very hard, and the mortgage you will be perceived as a catastrophe. As a result, a significant part of your life will take place against the backdrop of a local apocalypse.
What to do
Choose a payment amount that you will be easy to pay, even if something goes wrong. In this case, you can always put out the mortgage early, which would save percentage. If force majeure did not happen, you simply will pay it ahead of time.
- How to extinguish the mortgage ahead of schedule: to reduce the time or payment
2. To give all the money for a down payment
Another very understandable mistake - to collect all the money and give it as a down payment. So you reduce the size of the loan, respectively, less than overpay bank and return the debt faster.
If you plan to move to an apartment after the repair, for sure you set aside money for the plywood wallpaper and the installation of new plumbing. But if you decided to first for some time to live in the interior, left over from the previous owners, should be prepared to spend on improvement. Current watering can shower and mold on the wallpaper, previously hidden behind a cupboard, require immediate intervention.
Moreover, it can happen any trouble, which will leave you with no income. In that case, nice to have saving.
What to do
Make inviolable savings in the amount of two monthly mortgage payments. So you will experience no problems during the force majeure. In addition, it is better to calculate and to leave a certain amount of the resettlement. If the apartment will be without flaws, all your fine furniture in the rooms and get up to buy anything do not need, will make just the amount in the account of early repayment and reduce the term of the mortgage or payment.
3. To refuse insurance
Life is unpredictable, and in some cases, the headache you will not save even a reserve fund for a few months of mortgage. If a family member dies or can not work anymore, the mortgage becomes unaffordable burden.
What to do
To insure the life and health. If the tragedy, the insurance pay off debt. But it does not approach the issue formally. Compare offers different insurers and read the terms carefully. For example, the contract may be specified list of chronic diseases for which we can not count on payments.
It is important when looking for a bank to take out a loan, consider insurance costs. Where require, for example, be sure to arrange an expensive title insurance. As a result, mortgages with a low interest rate can be higher than with a higher percentage, but flexible requirements for insurance.
- Audience: Life Insurance and how to arrange it
4. Save for essential
If you choose instead of the supermarket convenience stores to buy the same products cheaper, or do not buy jeans in the tenth collection of denim, it is rational. Such measures do not look like an unbearable sacrifice, they did not so much affect your existence.
When the desire to save money completely changes your habitual way of life easily turn into suffering. And if you save on things that affect the health of those suffering can easily move from the moral to the physical. Cheerleaders have symptoms like these:
- You choose the products, focusing only the price. Their composition and balance of the menu you do not care. Disappeared from the diet of fruits and vegetables.
- You suffer from pain and discomfort, but you do not go to the doctor, because the visit could result in spending - at least have to buy pills.
- You have thrown all the hobbies, because it is expensive, and do not know what to do with your spare time.
What to do
Before you take out a mortgage, a sober look at what you will find. A large loan - a long-term undertaking, which can not simply pull the plug. - Your task is to integrate it into your life, rather than subordinate mortgage to exist. Otherwise, you may find that these years were a blur, and if for nothing. Separately think about vacation: will not leave in the next 10-15 years, if you have previously traveled extensively, very hard.
A sober assessment of their spending, saving opportunity and once again re-read the first paragraph about a comfortable payment - it is the truth important.
5. Do not repay a mortgage early
You take the credit, based on current financial conditions and their regular earnings. By default, the overpayment will be great, and when you make a mortgage you put up with it. So just pay on schedule, without taking into account additional revenue. Everything that you earn in excess of the original rules, goes on vacation and entertainment.
But early repayment of the mortgage - this is a great chance. If you pay off early, overpay the bank is much less. In addition, the apartment will be completely yours. And the damage caused by these additional contributions will have no - you do not know about those proceeds, when taken credit.
What to do
The most obvious ways to reduce the debt burden - to use for the early repayment of the cash gifts and tax deductions. In the case of a mortgage every thousand matters.
Let's say you took a loan of 1 million for 8 years at 10%. Monthly payment amount to 15.2 thousand, and the overpayment - 457 thousand. You were born in May, your husband or wife - in January. If you are after every birthday will give a mortgage an additional one thousand rubles, overpay to 7000 and will give less debt a month earlier. The figures are not very impressive, but it comes just something about 15 thousand, spread over eight years. If you give more, and the benefits will be tangible.
Also do not forget that over the years, your salary will increase and additional earnings (adjusted for inflation - prices for everything too, will grow) should also invest in mortgages.
And you made these mistakes? Share in the comments.
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