Mortgage Features Explained

Which Mortgage Features Can Benefit You?

While a mortgage was once nothing more than a loan with interest charged and repayments made, nowadays, there are so many options and features that it can be difficult to know which suits your needs. If you are feeling overwhelmed, AREA Title Agency has a post with information about two common loan features.

Redraw

A redraw facility can be great for homebuyers who expect to receive bonus payments from their work, investments, or another source of income.

• Consider that you made additional payments of $500 every month.
• These payments would reduce the amount of interest you pay.
• If, after six months, you needed access to cash, you could withdraw $3,000 from your redraw facility.
• The interest would then be charged on the total outstanding.

If this is a service which you think will benefit you, consider that it may attract fees, so be sure to ask your lender.

Interest Types

There are two types of interest rates available for a home loan. Variable interest rate As the name would suggest, the applicable interest rate can vary, depending on the residential and financial market, both up and down. A variable interest rate can be a great benefit when the market is in your favor, however, if the market shifts and instead favors the lender, then your interest rate will shift with it. Fixed Interest Rate In contrast, a fixed interest rate doesn’t fluctuate. This means that the interest charged throughout the life of your rate-lock is fixed. While can seem great, fixed interest rates may not seem attractive if the market is in your favor, however, they do offer security, knowing that while you may have missed out on periods of a lower rate, you will be protected from rate increases.

Protect Your Investment with Title Insurance in Toledo, OH

Your lender will require title insurance, and so should you. Before you settle, speak with AREA Title Agency at (419) 242-5485 and find out more about how title insurance in Toledo, OH can provide you with peace of mind.