Why Should You Check The Conditions of The Mortgage Contract before signing? There are many good reasons to do this. Here are just some of the benefits:
A lot of people are tempted to skip this very important step. They fear that a pre-approved mortgage deal would be an offer they couldn’t refuse. They fear that a pre-approved mortgage deal would mean that they could get into a trap where they would get into a mortgage that they couldn’t afford and then end up losing their house. Or worse, they fear that they would get into a situation in which the mortgage repayments would be too large to keep up with and they wouldn’t be able to keep up with their mortgage payments. Therefore, they feel it is imperative to check the contract before signing the deal.
There are two main ways you can check the condition of the mortgage agreement. One way is to check it yourself at the time of signing. This is easy to do, but many people find that it is not worth the effort. Checking a mortgage deal at the time of signing is difficult because the details may well have changed since they initially signed the contract.
What you need to do to check the mortgage deal is to obtain a copy of the contract from the supplier or lender. Then, use the checkbook or your pen and paper to compare the original terms and conditions with the one being quoted at the time of signing. Make sure you are comparing like for like. For example, you are comparing the term of the mortgage over the years rather than just comparing the initial rate. If you do that, then you will have a better chance of getting a good deal.
There are some problems with just checking the contract at the time of signing. Suppose the supplier or lender changes the policy or add another condition after you have checked the contract? Then what you have done is to check the new deal, and your mortgage will have been changed. What you need to do is to check the new contract and make sure that your existing mortgage does not conflict with it.
Another reason why you should always check the contract is to make sure that you are getting the best deal possible. Suppose you have found a cheap interest rate from a supplier but when you go to pay the mortgage, you find that the monthly repayment is much higher than you were told it would be. You can then check with the supplier to find out what the new rate is and whether you can save money by switching the mortgage.
Some mortgage deal providers also offer a no prepayment penalty. If this is available, you should ask the provider whether they will allow you to pay the balance of the loan even before you have settled the first mortgage amount. This way you can make sure that you do not have any extra burden on your head and you can also go in for a cheaper rate.
Before you go in for a mortgage deal, make sure you understand the terms and conditions. Do not just check the interest rate because this will not help you. Rather, check the contract to understand whether there are other costs involved, whether there are other clauses like prepayment penalty or whether the repayments can be deducted from your salary. There are many more reasons why you should check the mortgage deal. Hence, the more you read, the better decisions you will take.