Housing loan interest

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Housing loan interest
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Floating Interest Rate Housing Loan
Housing loan interest has rates that adjust
itself on a weekly, monthly or yearly basis. It
all depends on the kind of package that you have
decided to take up. A floating rate package is
normally pegged to an external rate, like the CPF
interest rate, the bank's internal board rate and
etc. Normally risk adverse consumers will avoid
floating rate. They cannot live with the
uncertainty of a floating interest rate. A
Housing loan interest can go down, but there is
an equal chance that the rate might go up too.
Another problem with floating rate is when it
goes too high, the installments get more
expensive plus if you are using CPF, you might
have some administrative work to handle as
well. Investors with bearish outlook for the
market and consumers with a larger appetite for
risk can afford to take up floating rate housing
loan. With the right research, sufficient cash
flow and appropriate amount of guts, taking up a
floating rate can be the right move in the right
situation.
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A floating interest rate normally has a low
teaser rate to entice borrowers but how it
actually performs in latter period is unknown. No
advisor can predict the future accurately so
ultimately the final decision has to do a lot
with the consumer's personal outlook and
character. Housing loan interest can come with a
non lock in or lock in period. For those who are
looking to stay short term, they can opt for a
package with a non lock in period.
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Talk to a mortgage advisor if you want to take up
a Housing loan interest. The advisor can advise
you on the mortgage and the implications it can
have on your CPF. He or she can talk to you about
the advantages and disadvantages of taking up a
floating rate and provide some assessment on
whether are you really suitable for it.   Article
Source http//EzineArticles.com/1497206
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