Finance Curriculum

It is easy to get bogged down in detail when you are looking for a new mortgage or personal lending options. Many mortgage providers seem to write their brochures in a deliberately obscure manner designed to confuse their potential customers as much as possible. One of the most confusing aspects of mortgage hunting is that the same amount of money seems to attract vastly different rates of interest. Learning about these interest rates will help make the process of finding the best mortgage much easier.

Fixed rate mortgages are those which offer their customers one rate of interest for the whole term of their mortgage. The main benefit of these is that they offer certainty: no matter how your gas, electricity and other costs may rise, you will always know how much your mortgage is going to cost you. Alternately, there are variable rate mortgages, where the amount of interest will change as the lender’s basic rate rises and falls. While you may end up paying much less in interest, you could also lose out if the basic rate rises.

The choice depends on whether you prioritise stability or best value. If you would prefer to know exactly how much you have to pay ever month over the years, fixed rate mortgages are better. If you want to take advantage of periods of low interest rates, variable rate mortgages are the choice for you.

The quality of the loan majorly depends on what you want from a loan at that point of time. Several aspects of loans like interest, payment options, severe time of process. While the loans that you want may be sweet at that point of time, they may turn out bitter with time as the reality sets in. The best way to keep them is when they are bittersweet.

While cheap loans are generally the best loans, it is important to keep a few things in mind while you have a thought of getting yourself a loan scheme.

Choose your priority at that point of time and know what you want from the loan. Don’t overlook the possible obligations and end up overpaying in the long run. Have a long run picture. It might be too high a price to pay.

Sales representatives are not your friends and all they are looking forward to is to make the sale. So try not to get the niceties over your head.

Ignore the marketing. Ignore the sugar coatings. Even though it might be hard to resist that, marketers know channelling human behaviour better than average psychologists. This is how you find the best loans. They want to sell to us the things but those we want to get used to, for attractive prices. Don’t dupe yourself with the red sale stickers. Don’t succumb to them and stay grounded. Meet your obligations.