Mortgage helps millions of people in buying many things. Not all of them can manage high expenses from buying things like house, cars etc. The repayment of the money is according to the lender’s preference like monthly or with or without interest. But a certain period is allotted to repay the entire money to the lender. Let’s get into the advantages and disadvantages of Mortgage.
What are the Advantages of mortgage?
The borrower must repay the money within the specific time period to lender. If not, the lender has the rights to seize the property back to him. This, helps in securing one’s own property though it is sold without any proper payment of money.
Repayment in small amounts:
Mortgages helps people in buying the property for less amount initially and are returned back in small amounts. Thus, even normal income people can buy high cost property. It is highly efficient.
House is one of the main properties that is bought with mortgage. It helps many people in affording a proper shelter and it can be repay with monthly installment. Even, cars costs more so people prefer mortgage due to high expense.
People can plan efficiently for managing high expense. Even property can be rented for mortgage. Thus, money is managed properly.
What are the Disadvantages of mortgage?
The mortgage value is not fixed for a property. It is varied accordingly. People pay more amount of money than the initial cost. Hence, more people try to avoid getting property on mortgages.
The responsibility regarding the property’s insurance, maintenance etc. is to be taken care over the period of time. So while returning back to the lender he may keep a additional fee to make up for the loss of the property.
People should plan well whether they can repay within the specific amount of time. If not, the property will be seized. It may create a big issue in case of highly valued property like house or car.
The interest percent should be discussed entirely before agreeing to the agreement. penalty fee may occur in order to pay fully to come out of the mortgage agreement.