Many people think that the cost of a mortgage is the interest and that is all. It is important to remember that there are other costs as well and these need to be considered.
Firstly you will find that the lender will charge you for their searches, where they take a look at the property that you want to buy and they decide whether it is worth the value of the mortgage. They will also charge you an administration fee when you open the account. They may also charge you fees for having the option to overpay the mortgage. If you cannot keep up with the repayments or you make the payments late, it is likely that there will be fees for this as well.
As well as the costs from the lender, there are additional costs to consider. The lender will insist that you take out two insurance policies. One is to cover the cost of the mortgage should the person/people responsible for paying it die. This life assurance will have to be for the value of the property and will cover the cost of the repayment on the loan. They will also ask that you take out buildings insurance. This means that if the property is damaged, you will be able to get it repaired without having to pay too much money. The lender wants to make sure their property retains its value, until the ownership is passed over to you. If it burns down, for example, they want to make sure that it can be rebuilt and then if you are in a position where they repossess the house and want to sell it, they will be able to get back the money that is owed to them.
This means that you will not only have to consider the cost of the mortgage payments and the deposit on the house when you get a mortgage. You will also need to factor in the cost of the insurance as well as the flat fees on top. It means that you may have to save up more money before taking out a mortgage and you need to aware that you will have to find extra money each month to cover the insurance costs.
Melbourne Mortgage is a great site to visit if you are looking for mortgages in Australia.