Archive for September 2020

Six Smart Tips to Qualify for a Home Loan

There was a time when buying a home was considered to be a challenging achievement. But, as real estate and financing markets underwent progression, house purchase became quite wide-spread. Average-income individuals could afford a reasonable shelter on their head and call it their own without having to pay the full price.

However, no compromise has been ever made on the formalities that a homebuyer is required to fulfil in these years.  A few components like age, income, credit score, location of the property, repayment capacity still remain the crucial parameters to evaluate your ability to apply for the loan and affect your application status.

Therefore, it is highly recommended to gain a complete understanding of them and always be considerate of these expert tips –

  1. Maintain Your Credit Score

Your credit score is the first thing that lending institutions evaluate before providing any loan to you. So, if you look forward to getting a go-ahead for your mortgage from lending institutions, you better maintain a clean history of credit bills and timely repayments of existing loans.

  • Pay Higher Down Payment

Your home loan lenders can finance anywhere between 70 to 90% of your property’s price, and the rest has to be contributed by you. However, instead of paying the bare minimum value, it is wise to make arrangements as high as you can from your pocket. That will immediately boost your eligibility status.

  • Have Clarity on Your Job and Career

Every lending institution you are ever going to contact will always be concerned about your job status and income. The loan sanction officers will consider your net salary, monthly expenses and any other EMIs on the run to assess your repayment capacity. A surplus of 50 to 60% is what they require.

  • Show Multiple Sources of Income

To get your home loan application clearance in one go, try to include an additional source of income if possible. That can be from a rented property, any part-time job or a side business. With this step, your financial health can improve, and your lenders have a surety of loan recovery on time.

  • Add a Co-Applicant

Including the name of family members, spouse or siblings that have a stable source of income and good credit can be extremely beneficial in the case of joint home loan. You can club their earnings with yours and make them a co-applicant to get your loan sanctioned quickly and at affordable interest rates.

  • Keep Your Calm

There is no benefit in hurrying over a home loan. A good amount of research and effort is required for the process, and terms and conditions have to be finalized. All the necessary documents have to be arranged and a full assessment has to be done. So, take your time and go with the flow.

Four Crucial Loan Tips for First-Time Home Buyers

Home buying is exciting and fun, especially for the first-timers. There are long-term dreams that are on the verge to get fulfilled, hence a great impatience to sign off the deal and take over the ownership. However, amidst that eagerness, one can commit mistakes that can lead to severe disappointments or financial setbacks.

One must understand that a real estate investment is an expensive one. Also, the mortgage liability that comes along is complicated and critical. So, to get most out of it and ride through as smoothly as possible, you have to do some research and be considerate enough of the following things –

  1. Assess your Loan Affordability

You might be eyeing a 5 BHK villa on popular streets of Montreal, but have to forego 70 to 80% of your monthly salary. Therefore, you better be realistic with your pocket limits and filter out the extravagant choices in the first step. Use a mortgage calculator to know what price of the home you can afford. That way, you will not have to waste time in looking over properties that are outside your budget or trying to get pre-approval for loans with high EMIs. Choose the programs where mortgage rates are within 50% of your disposable income.

  • Make Arrangements for Down Payment

Generally, banks and other lending institutions fund up to 90% of your property value; which means if you are buying a property worth $500K, you might get a loan up to $450K. But, that does depend on your lender and the type of loan you choose. So, be ready with at least 10% of the purchase price as the down payment of the home. If a large down payment is not your cup of tea, then look into FHA loans. Also, discuss with your mortgage broker for the other suitable options.

  • Maintain Good Credibility

Every mortgage lender first evaluates your credit report before loan approval. Hence, if you wish to get the best deal on your home loan shortly, you have to start improving your credit status from now on and fix the flawed records as well because a low credit score decreases your chances of getting loan approvals. You just keep up with the habit of clearing off the bills and not apply for any new credit if you aren’t sure of it. After all, you don’t want to mess up your credibility during the loan process in case the lenders pull out your credit report for the second time.

  • Compare Rates

All loan programs are not equal. Even the mortgage programs offering the same interest rate can differ from each other and its benefits can vary from lender to lender. If you find yourself in a similar situation, just be thoughtful of the components that go into determining its overall price. Then, make a sensible comparison between various banks and lenders. Make sure you watch over the seasonal offers and subsidized rates too.