NQ Finance Group

Business and Financial Technology | NQ Finance Blog & News

Golden Rules in Getting Home Loans Townsville

In getting home loans Townsville, what are the rules that are necessary to be followed?

We can have all of the money we need to provide our needs ourselves, however, that’s not the reality. Many of us are given the littlest of options. With this, all kinds of lenders are taking advantage through flooding loan offers by emails and phone calls with some promising low rates and quick processes as an effect of the advanced technology that has been integrated into the lending industry. However, the tradition of borrowing hasn’t changed. If you don’t need the money, there’s no point of borrowing. More if you avail a long-term loan only to find out you are enjoying the tax benefits on the interest you pay.

Here are some of the rules borrowers must keep in mind before settling on a decision:

Don’t borrow for investment purpose and splurging

If you want to invest in something, don’t finance it with a borrowed money. For once the market declines, you will suffer losses. Also, avoid availing a loan for unnecessary spending. It’s not a good idea to get a personal loan just to buy a luxurious watch or bags, or for travels, it would be better if you save up for them.

Take a loan that you can easily repay

One of the rules of smart borrowing is not to borrow more than you can repay. Just like the famous idiom, “don’t live beyond your means”, just get a loan that you can simply return when it’s due for payback.

Before you finally decide to get a loan, take a look at your loan-to-income ratio if it is within acceptable limits. If yes, then have your loan. Otherwise, your income will be gobbled up resulting in sacrificed financial goals such as your kid’s education, retirement planning, and more.

Keep home loan tenure shorter

To some home loans Townsville lenders, they will offer loan tenure up to 30 years. It is given that the longer the period, the lower the equated monthly instalment, but the interest can go too high and sometimes shoots up to more than half of your borrowed amount.

Get insurance cover for large loans

It is best to also get an insurance cover if you are to avail a large car or home loans Townsville. This can be achieved by buying a term plan that is of the same amount ensuring that your family will not be tied with unaffordable debt if ever something happens to you. Banks usually offer a diminishing cover term plan which is an insurance equal to the amount, however, a regular term is much better.

Keep an eye on better rates

Having a long-term mortgage must never be an exercise of sign-and-forget. It would be better for you to be in the know of the changes and new rules in interest rates. When you spot a cheaper loan or with the best rate, switch as soon as possible. For the earlier, the larger its impact on the tenure of your loan.

Read loan documents word for word

Such critical agreements should be taken seriously. Ask for a physical loan document and read it word by word, especially the terms and conditions. If ever you find it comprehend the legalese, hire a chartered accountant or a financial advisor to review the agreement before you finally sign it.

Replace high-cost loans with cheaper ones

If you currently dealing with a lot of loans, it would be a great idea to combine your debts under one low-cost loan. Achieve this by having a list of all your loans, identify the ones that are costing you too much and then replace them with cheaper loans.

Timely repayment of dues

Whether it is a long-term loan or just a short-term debt like that of credit card bill for your house, make it sure that you are able to pay your dues. It pays when you are disciplined when it comes to repayment of fees. Or else, not only you’ll suffer from unapproved loans for your future needs if you delay your payments which a factor that can affect your credit profile, but also face penalties and unpaid interest charges.

If you think we missed a single rule or two, comment them down below!