For the vast majority of us, homeownership means a monthly mortgage installment. If youre not careful, the installment payment can quickly grow beyond your budget, so take a minute to find out what goes into an installment before you start making offers.

A monthly home loan installment contains three parts. First is your monthly repayment loan amount with capital and interest payments. Second is their monthly administration charge. Third is the insurance premium of the homeowner and sometimes life insurance premium also.

To start manipulating your expenses, you can contact house credit calculators or actual domain websites. This will be your initial starting point. Considering that your home loan part payments cannot surpass 25% of your gross basic earnings if you are solo or 30% of a mutual earnings.

Installments of loans taken by you are highly affected by the rates of intrest fixed by bank. Home loan base rate are fixed for you by your bank as per your credit record. If your record is good you may get rate reduction but above all negotiation for a bettr deal is advisable.

Monthly installments are also heavily affected by repayment terms. Even though the normal period is 20 years you can choose to extend that period by 5 or 10 years more. When you do this your monthly payment will be less but you will pay significantly more money in interest over time. By using an online payment calculator you can get help deciding which route will be the best for you to take.

Administration fees payable every month differs with each loan, so check what amount applies for you before agreeing on the loan.

Because of the National Credit Act, borrowers are no longer obliged to purchase homeowners insurance from the bank that provided money for their home loan. Individuals can now shop around and select one that suits your requirements. You will nonetheless be expected to surrender the policy to the bank financing you. Also buying a policy with another carrier will increase your monthly administration fees. If indeed you opt to buy insurance from your lender, the premium will be added to your monthly payments.

Your banker may or may not require you to purchase life cover to pay off your home loan in the event of your death. The premiums can be added to your installment. Even if your bank does not require this additional step, it is wise to consider it for your familys peace of mind.

A great way to determine your monthly installment payment is to get a pre-qualification certificate before you start house hunting. Getting this certification will let you know exactly how much you qualify for and what you will pay. It will also indicate to sellers that you are making a serious offer and help speed up the final mortgage process once youve found that perfect home.

Tom Martens is the content coordinator for South Aricas leading Homeloan portal which amongst others offers origination services for FNB homeloans