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Mortgage Loans As Per Your Requirement Now

Builders who opt for an annuity loan benefit from particularly favorable interest rates and relatively low monthly installments. But it is worthwhile to pay attention to the additional costs.

What is an annuity loan?

Anyone who flirts with the purchase of his dream home, has to raise stately costs and usually chooses a long-term financing. The usual way is through a mortgage loan. This can cover up to 80 percent of the construction and land costs. Whereby usually a certain variant of the mortgage loan is taken, namely an annuity loan.

Annuity means “the rate remains the same”, and thus the advantage of this loan form is already named – at the beginning of the financing you know exactly how much money is to be paid to the mortgage lender by the end of the agreed term per month. As a borrower, you are so safe from unexpected burdens or claims. To secure the annuity loan, the property is mortgaged, which is entered in the land register. The best options for the good at mortgage loan singapore is here now.

The constant monthly installment of an annuity loan is made up of two components: the interest portion and the repayment portion.

At the beginning, the repayment of the loan is relatively small. However, with each payment shrinking the residual debt, the portion of interest on the annuity loan decreases in rate, and the repayment installment increases. What is only logical then: the higher the repayment, the shorter the term. At the end of the fixed interest period, the loan is only prolonged with the remaining debt. The annuity loan is the most commonly chosen loan type. Payment of the rate is usually monthly, but other payment intervals are possible.

Especially with the current low mortgage rates, experts therefore advise a higher repayment than the usual one percent.

Beyond the stipulated installment amount, many banks offer the borrower an interest rate fixed over a long period of time, called fixed-term interest. This minimizes the financial risk to the borrower as the installment does not change. By agreeing a long term, the rates can be kept small and above all constant, so that the borrower is not exposed to high financial burdens.

The amount of initial repayment can usually be set by the borrower himself. Many banks, however, require them to be at least 1 percent. Most mortgage lending is now funded through annuity loans, as this method of financing can be reasonably calculated. Particularly in the case of owner-occupied housing, this form of repayment loan is considered a classic method of financing.

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