Tuesday, February 23, 2010

More Tips on Loans

It pays to shop around. I had a great experience today with the MUFG home loan representative. She was very polite and actually did not act scared to give me a loan.
She patiently helped me fill in the forms and made copies of all the necessary documents I brought with me.

Tip #1: Finally a break for people with kids.
One thing I was not aware of is with regards to the "Big Family" offer they have. Essentially if you have more than 2 kids you are eligible to get 0.1% off your mortgage rate. This applies to campaign rates too so it's not a either or situation. So if you have children, best to ask your bank if they offer any deals such as this.

Tip#2: Delay the start of your loan.
Of course you'll have to live somewhere while you design it and get it build (that process is about 7 months) during which you will need to cover both rent and land mortgage payments. You should ask if there is a way to defer the start of your mortgage to until you've moved in. The maximum you can defer is 12 months. In terms of costs, the estimate I got was about 4% of my monthly mortgage per month. So if you're more mortgage is 20man, 8000yen per month or so. You can get your loan person to provide you the quote. Do note that although the period of the loan is the same, the number of payments is lower and this will slightly impact your monthly payment.

Tip #3: 5 Year Rule on Monthly Payments:
If you choose a floating rate you should ask about the Five-year rule on monthly payments.
The way it works is that your payments are fixed for 5 years and are revised based on the adjustments in the floating rates within those 5 years.

Tip #4 : 25% increase cap on interest Payments:
So what happens if the rate goes from 1 to 10% in the next five years?
Though improbable, in the above scenario your monthly mortgage would not double or triple.
The maximum increase would be 25%.

Hope this helps.

No comments:

Post a Comment