Home loan contracts are often found during advice. You already know that it is worth reviewing home loans every two to three years, because there are many things that can happen in two to three years that can make your existing loan better. The value of your salary or real estate increases, reducing your equity-to-equity ratio, a competing bank comes out with a better product, and at a similar rate, you get a fixed rate of ten years instead of one year and other options.
I've already talked about this at the Academy, and I don't want to write about it now. (This whole section is about loans, if you are thinking about borrowing and haven't looked at it yet, it is worth checking out this section from the beginning.)
What I want to write about: When you take out a loan, be very careful. Not only in terms of how much you buy and for how many years, with what interest period, but also where, at what interest.
Also, pay close attention to who you listen to
People choose their next cell phone or bluetooth headset with great care, but I want to borrow quickly. They go into their own bank and ask the clerk what they have to offer.
The more lively ones seek counseling, hoping to get good advice from them. Unfortunately, you can't always be sure. Now I had someone who took out a loan for a couple of months, 25 million HUF. According to the contract, a credit counselor handled their loan. While they could have a 10-year fixed loan, they got a 5-year fixed one, so they have a serious risk if interest is lost within five years. But interest rates will almost certainly rise, even radically, within five years. Thus, in five years' time their interest payable will increase by two to three times.
The saddest thing is that a 10-year fixed loan would have been 0.8% cheaper elsewhere than a 5-year fixed one at this bank. This is an additional interest of HUF 1.3 million over 10 years even if the interest is not carried over for the second five years at the turn of the five-year period. If this happens, this loan will be a few million forints more expensive than the other one.
Although they want to pay off the loan within 10 years
They have been cured of a 30-year maturity, so they will have to pay for the final repayment, which will be a very heavy sum of hundreds of thousands of forints.
They have indicated that they will use the four apartment savings, which will expire soon, and then tie another four, which will also be repaid. They would have received a consumer-friendly home loan that could be used to repatriate home savings for free. Well, they didn't get one, so the prepayment of twice the four apartment savings would cost you 156 thousand forints.
The notary almost cost 100 thousand forints, and elsewhere it is much cheaper. If they knew they had the opportunity to use their own notary, they could have saved $ 50,000 here.
Enhance? They didn't even take such a bad credit, even compared to what they could have run into. Still, they would regret a few million forints if they didn't redeem their loan. If they are redeemed, they will also lose two hundred or two hundred and fifty thousand forints due to the cost of redeeming a loan, but this is a smaller loss.
What I want to say is take the time to look at the terms of your loan. It's not as important as your latest bluetooth headset, which you decided after reading 15 tests and looking for two days, where you can get the cheapest $ 10,000.
As you can see, just how much worse a loan costs
What is the extra 0.8% interest and only five years instead of ten? That's it. Up to millions of forints plus.
And pay attention to who you listen to. As you can see, it's not enough to look for a consultant you don't know anything about. You can go with an inexperienced or some bank preference credit counselor, or with insurance agents calling themselves financial advisors.
Borrowing for 10-20 years, especially when it comes to large amounts, is one of the most serious decisions of your life. Treat it accordingly. Didn't you regret taking the time to find the apartment you want to buy? Good job. But choose the same loan with the same care.