To mortgage or Not to mortgage?

To mortgage or Not to mortgage?

Navigating the tricky waters of the home financing requires much planning and information gathering. There are so many factors to consider and, luckily, there are a variety of financial institutions that provide options to suit your needs. The key is to understand where they differ.

For example, banks vs building societies: the former are companies listed on the stock market and are therefore owned by, and run for, their shareholders. As a result of not having to pay dividends to shareholders, building societies claim that they have historically offered higher rates of interest to savers and cheaper mortgages.

Alternatively, if you want to secure a loan, a credit union may just be the right option for you. At a credit union one can borrow multiple times the amount you have in a share account.

Consider approaching this as you would if you were trying to decide what school to send your child – your most valuable possession – to. What is your end goal, and which kind of institution will help you get there? Where will you find the most value-add to your investment? Do you wish to borrow or are you looking for the most convenient and/or secure place to hold your funds?

While shopping around, try not to be solely tempted by whoever quotes you the lowest rates and fees. On the surface, that seems like a win-win strategy, but the lowest rates and fees won’t make up for poor service, hidden costs or a lack of transparency.

Once you have decided what kind of financial institution best suits your needs, it is worthwhile making note of their online access availability, size of a branch network, and proximity to work or home for your convenience.

Finally, it is essential that you know what kinds of fees are associated with your account. Some instituions charge customers for depositing and/or withdrawing money and others have minimum balance requirements.

Please ensure you read the fine print so as to adhere to terms and conditions, and to avoid any costly surprises!

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