Although most of us would find uneasy to think that we have a debt which has to be paid within a long period of time. Yet, most of us can’t help but take the bait and apply for a mortgage loan to raise the necessary amount to purchase a real property which we badly need. Having a real property which we can truly call our own is indeed one of our basic needs. Unless of course we want to be a vagabond who doesn’t have a permanent address or a monk who is so engrossed in things which are divine and metaphysical, we will surely aim to have a house of our own.
However, many people may find their salaries not enough to immediately pay for a real property. Even if they are assiduous enough in saving money since their childhood, the savings that they would have garnered through the years will surely not be enough to purchase a real property, considering the staggeringly high prices of real estate nowadays, especially, if it is located within the city. Hence, they sometimes got no choice but to avail of a mortgage loan.
Once you, for example, decide to avail of a mortgage, you should immediately look for a mortgage broker who can assist you; and the said broker would surely ask for a retainer. Mortgage broker retainer is necessary because it covers up all the expenses incurred by the broker in looking for the lender who would provide you with the necessary loan.
The moment you bite into the mortgage prospect and avail of it, you will immediately feel the pang of being indebted when the day of the first payment comes in. You will realize then that you are already bound legally to pay the monthly amortizations, and if you renege on your payment, you will face the bad prospect of foreclosure of your property.
Likewise, you are tied up to the prospect of paying the yearly interests stipulated in the loan. The interest is the amount that the lender gets at the end of the repayment of your loan. Moreover, the lenders only means of profiting from lending you is through the interest, and the interest is usually calculated based on the principal, the interest rate, and the number of years to pay. Although the process of calculating the interest may seem to be complicated to the uninitiated and to the ordinary guys who simply want to avail of a mortgage, the process is still quite understandable to the ordinary guys. There are basic formulae on how to calculate the interest, yet, I would not go into the details of these formulae for lack of space and time, and for fear that you might be further confused if you see the various equations used to calculate the interest. However, since the interest is usually calculated based on the principal, paying off your mortgage loan in advance can help you save money in the long run. You should however first check the stipulation incorporated in your loan before you make advance payment, for some lenders incorporate a stipulation in the mortgage terms and conditions which penalizes a borrower for advance payment.