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Mortgage loans: reduce the risks

Published: Fri, 12/09/2011 - 11:27
By: admin

The global financial crisis, the active phase of which began in 2008, called "mortgage" because of its root causes. The U.S. Mortgage has developed as a house of cards, because of falling property prices and the unwillingness and inability to service debt borrowers in difficult economic conditions.


Residents of most countries continue to borrow to purchase housing, despite the crisis. As a borrower can reduce their own risks and to avoid forfeiture of housing because of late payments?


• The larger the size of the initial deposit, the less risk is taken by the borrower. Try to make a down payment of at least 50% of the cost of housing. This allows you to not stay on the street, even if you miss a few payments. If the contribution is less than 50%, the bank has every right to evict you if you skip payments.


• Take a loan in the currency in which you receive income. This is especially true for people in developing countries who are trying to arrange loans in hard currencies from low interest rates. This tactic can take away your home in case of sudden changes in the national currency to the dollar.


• arrange the mortgage with a fixed interest rate in periods of economic calm. Prefer a floating rate in times of crisis. The value of floating rate should be tied to objective financial indicators, such as the Central Bank refinancing rate. This will reduce the cost of the mortgage after the stabilization of economic situation.


• Choosing a bank affects the condition of the borrower who is in a difficult situation. A solid bank does not apply penalties and requires no early repayment as soon as the client did next installment. Bankers with a client looking for a way out. This allows the borrower to maintain housing, even if he temporarily left without a job.


• The quality of the property, its location allows the borrower to minimize losses in case of a forced sale. The borrower will be able to return the bank his money, if the object to sell for the same price at which housing was purchased.


Buyers have an adequate supply of cash, can buy profitable real estate and get a loan with minimal cost in time of crisis. Experts Farlega Investment Limited provides advice on financial management and control of personal finances.