Should you get advice when taking out a mortgage?
Before taking out a loan to buy a home, check your capabilities, find out the requirements of banks, and calculate backup options. So, you can’t do without advice here.
Find a home and a specialist.
First, for example, you need to find the property in which you want to buy an mortgage on. If this is a new building, find out in which lender it is accredited to, and what conditions are offered in each of them. When it comes to secondary housing, you need to look at which lending institutions have the appropriate mortgage products. It happens, of course, that a potential buyer initially chooses not because of the property but from the available amount and from the bank offering loyal conditions, and only then looks for a suitable object. But this happens quite rarely, as many people have a set criteria for their potential homes which many would be uncomfortable diverging from.
Be careful.
By promising you low-interest rates on your mortgage, the lender can also make related services such as increased commissions or ban early repayment of the loan, all sorts of which will add additional fees that will lead to high costs.
Often, the more difficult the conditions that the lender puts forward for the approval of a mortgage loan, the lower the amount of the overpayment will be. And, conversely, if a credit institution issues a mortgage very easily, with minimum requirements, then this should be alarming.
Selecting the house and calculating loan conditions
At this stage, you first need to choose an apartment and then get approval for it.
When choosing real estate, you need to clearly compare its price and the final cost of the loan with your solvency. The monthly payment must not exceed 30% of the family’s income.
It is important to choose a convenient payment period so that the monthly payment is not too burdensome. It must be understood that the longer the term, the greater the overpayment for interest. It is better to repay the loan ahead of schedule, and this will reduce overpayment.
Submission of documents for a loan
Apply to several lenders. This will help save time in the event that a refusal is received, as well as choose the best option offered by lenders.
Make sure that you do not have any current loans, there are no debts on previously issued loans, and there are no credit cards issued in your name. It is a good idea to close credit cards well in advance of applying for a mortgage, as the credit card account closes for several days.
It is also worth making sure that there are no outstanding debts to the state, for example, utility bills, taxes or fines.
Getting a loan
If the lender agrees to give a loan in full, a special current account will be opened when registering a mortgage, to which, after signing a loan agreement (from this moment, interest will begin to accrue), the loan amount will be transferred. An initial contribution will need to be made to the same account.
Do not forget that the insurance of the apartment must be renewed annually, and the relevant documents must be regularly submitted to the lender.
After registering the ownership of the buyer, you must contact the lender to complete the transaction – the money will be transferred to the seller of the apartment.
Written by Bader Albader, market researcher.