Top 10 Home Loan Tips
by Warren Peter Finance 03 June 2016
If you are hoping to buy a new house, there are several things that have to be taken into consideration before you apply for a loan. Knowing the ins and outs and the more important points when applying for a loan will go a long way in securing you the best deal possible which will enable you to purchase your dream home soon. This article – top ten Home Loan tips for you.
Here are 10 tips that will help you in your quest:
1. Bond Originator:
Get yourself a Loan Originator who will be able to work with you and help you to find the bank most suitable to your needs. With his close relationships with the banks, he will be able to get the best possible terms such as better loans, less interest and longer payment periods and also negotiate on your behalf, much better than you can do on your own.
2. Credit Report:
Credit matters. Your credit ratings are closely evaluated and make a huge impression on your application for a loan. In fact, you could say it is the most important factor in deciding the amount of your loan, the interest you will have to pay and the final outcome of your loan. Therefore, you should take a look at your credit report before the bank does. Check and see if there are any discrepancies or wrong entries. Get them all sorted out by communicating with the Credit Bureau so that your credit report will be one you won’t have to be afraid to disclose to anyone.
3. Pre Approval Certificate:
Your Loan Originator will help you with this. A pre-approval certificate means that the banks have evaluated your financial circumstances and your credit ratings and are willing to approve your loan. All they have to do now is to assess the property you hope to buy and evaluate it.
4. Disposable Incomes:
The amount of money you have once you have paid up your monthly bills and other utilities is what is called disposable income. This can be increased if you put your mind to it and make some sacrifices such as buy a car that uses less petrol, do less driving, cut down on unessential expenditure etc. For every little bit, you manage to save, your loan will be increased.
Most banks require mortgage insurance for security. This is done in case of natural disasters or in the event of the borrower’s death. Most private mortgage insurance is tax deductible and can be canceled once the loan payment is down to 80% less than the value of the property.
6. Paying off Early:
You can be penalized for paying off early. Check to ensure that there is no prepayment penalty on your home loan.
7. Inspection of Property:
Always inspect the house or property you hope to buy. This will enable you to see if there are any major defects or repairs needed in order to determine how much it will cost to carry out the repairs.
8. Budgeting for Emergencies:
Always keep in mind that apart from your loan repayments and other monthly financial obligations, emergencies such as an illness could occur wherein you should have something extra to cover these unexpected expenses.
9. Switching your Home Loan:
Switching means transferring your loan from your present bank to one that has better interest rates. Make it a point to review your home loan regularly to see if there are others who give better interest rates for your loan.
10. Shop Around:
Do not be hasty. Home loan rules are forever changing and it is always better to shop around and see whether you can find better ways to reduce repayments and save on interest.
The prevailing global economic conditions have made it difficult to obtain home loans if you do not have excellent credit and other related factors. Even amidst all these difficulties, it will be well worth it if you can obtain your loan to purchase the home of your choice. By going through the tips and reading more about it, will definitely help you in your journey towards purchasing the home of your dreams.