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Tips

The Most Common Home Loan Traps and How to Avoid Them

After you’ve moved out of your parents’ house, you’re well on your way to getting your own place. So you decide to apply for a Kinnisvaralaen or real estate loan. You notice that all of the options seem so easy and light, and the sales agent also seems really helpful as he tries to sell you the loan.

When everything seems too good to be true, you may want to ask yourself, “Is there a catch behind this offer?” There are traps that you may fall into if you’re not careful. Below are a few home loan traps you may encounter. We’ve also included tips on how to avoid them:

  1. Honeymoon Rates

First, let’s talk about honeymoon rates. These are home loan rates that are really low because they’re on a special discount. When you encounter a home loan with honeymoon rates, your first instinct is to probably take it since it’s so low. However, there’s a catch to it.

Honeymoon rates usually last for only a specific time period wherein the interest rates will shoot back up when the time period ends. Of course, the agent won’t tell you the time period unless you ask. So the solution is to always ask how long the honeymoon rate lasts and how much the normal rate is so that you can adjust your finances accordingly. Also, make sure to include the details of the honeymoon rate in your paperwork.

  1. No-Internet or ATM Bank Transfers

These days, internet banking and ATM bank transfers are very common, especially when you get a home loan. This is especially true if you get a home loan from your bank. They can usually just debit the loan amount from your balance.

If you happen to get a small lender that doesn’t do internet or bank transfers, be wary right away. Some of these cash-only loans are usually scams and may trap you in debt without you being able to do anything about it.

  1. Comparison Rates

It’s quite normal that you only look at the interest rate that is advertised and not the comparison rate. Just to give you an idea, the comparison rate is the net rate of the advertised interest rate plus all the fees and other charges incurred when you take the loan.

The agents don’t usually tell you the comparison rate unless you ask for a computation. So whenever you speak to an agent, always ask for the comparison rate plus the computation.

Conclusion

If you’re going to take a home loan, then it’s your job to do your due diligence. Always watch out for these three common traps that you may encounter when you apply for a home loan. Avoid getting into big debt by comparing several options. Only then will you which type of loan is best to take.

If you’re looking for a reliable home loan, you might want to check BESTCREDIT. They can offer you a full quotation for your loan.

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June 15, 2018