Thursday, February 21, 2008

Confused About Mortgages

Two years ago, when my Uncle visited us from Germany to attend my wedding, he and his wife hurriedly decided to get a property since they thought they wanted a retirement house here when they get older. Unfortunately, their financial situation has been turning sour for the past year and retirement plans would have to wait. Honestly, I think my Uncle didn't make a sound judgment before agreeing to buy the property. He was just swayed by the agent to make that quick decision. Thus, he is now faced with a big problem with his monthly payments lest the property developer charge them with heftier interest rate due to default payment.

In order to aid them, I suggested that they move out of the in-house mortgage plan they have with the developer and instead shift to the fixed rate plan with a term of 5 years being offered by a bank. Now my Uncle is ever more confused on how to manage his mortgage problems.

In a related article, I read that deciding on which type of mortgage is the best has been a perennial problem for homeowners like my Uncle. Mortgages are dependent on various factors such as the outlook on the economic that affects base rates. Moreover, it was said there that it is usual for homeowners, specially those who have limited time to study the plan before making a decision, to fail in choosing the correct type of mortgage which fits them. I think this situation describes my Uncle's situation perfectly.

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