When we buy a home loan, we often buy not only this product, but also sell us a number of other banking services.
However, since they are at the end of an exhaustively long description, even lower case , they may not be considered with the same weight. However, it would be a good idea to recalculate these terms as well – it is never enough to look only at interest and one-time costs.
Do you transfer our payment to the bank?
Usually there are mandatory products that we use for this and there are optional ones – the latter can be cheaper or more expensive for us. These include keeping your account with a bank or using life insurance, for example .
Many people choose to open an account with a particular financial institution, as their salary is entered here, as it offers significant discounts on start-up costs and interest.
Items included in the APR and not shown
So if we consider how much a home loan will cost us, let’s look at the following – let’s take the case that we have taken out life insurance to make the loan cheaper:
- One off start up cost
- Monthly account management fee
- Life Insurance Account Management Fee
- Monthly home insurance premium – the latter is usually left out of the stated APR
- Notary fee – also included in APR
- Optional: Term Extension Fee – Because it’s extra, it’s the same.
- Appraisal – around $ 100, one-off cost at start-up.
Let’s think carefully about choosing a loan-related home savings
Offered by a financial institution, as this may not necessarily be a better option. We can combine well: it does not matter, for example, how long you save for your home. It can be said that several short-term home savings are best invested regardless of credit. However, the end result also depends on the LTP offer (and credit).
So let’s calculate for each home loan whether the interest discount and other promotional options are so good that it’s worth the extra expense! Keep in mind, a lot of small things go a long way, so the seemingly low cost can substantially increase our monthly spend. If we choose wisely and do not go into the details, we come out with a positive balance.