A home purchase is among the most critical purchase decisions that a person takes in his/her life. Thus, a lot of time thought & investment go into it. For many people, especially for first-time home purchasers, a mortgage remains a very effective option to finance their home. This article will provide some tips related to mortgages for this category of buyers.
Most, if not all, people nurture a desire of owning a home someday. Owning a home, irrespective of its size brings with it a sense of security & achievement.
However, we all know that this purchase isn’t a small one. So as a prospective buyer (especially for the first-timer), you need to invest considerable time in it for researching, to finalize aspects like budget, finance availability, suitable lender, interest rate and many more things. Hence, you can contact a trusted mortgage advisor who gives you proper advice related to the mortgaged property like budget, plan, downpayment, process, etc.
Financing options assume high importance for the prospective buyer as most of them would buy the property by taking a mortgage loan. A mortgage can assist you in financing your home purchase, for sure. But you need to keep some points in mind related to mortgages for first-time buyers:
Things To Keep In Mind While Availing Mortgage Loan:
- Keep Your Property For Mortgage Free Of Dues-
Be sure to keep the property you intend to mortgage free of any municipal dues like property tax and many more. Such dues will lessen the value of the mortgage loan or also cause difficulties with the approval of the loan.
- Keep A Positive Credit History-
Be sure to clear all dues of your existing loans/credit cards, if any, on time. This will ensure that you have a good credit rating that will have a positive impact on your loan eligibility. You should always maintain an ideal credit score.
- Do A Study On Valuation Methodology-
Before a lender provides a mortgage loan, it will conduct a valuation of your property by an authorized valuation agency. Update yourself about how the valuation process works so that you are clear about why your property for the mortgage had a particular valuation.
- Keep Your Property Documents In An Organized Manner-
You must keep all your relevant property documents like title deed, tax receipts and other documents in proper order ready. The financial institution that will offer the mortgage loan will scrutinize these documents to process the loan.
- Do Some Shopping Around For The Suitable Lender-
There are multiple financial institutions that offer mortgage loans. Check out their parameters with care, including their upper limit for funding, tenure, mortgage loan interest rate, repayment terms & conditions (including part-payment and foreclosure charges). When you are aware of the various options available to you, you will find it easier to make a choice.
You also need to keep in mind that financial institutions won’t lend 100% of the value of your mortgaged property. Therefore, there might be a gap between the amount you have received as a mortgage loan and the cost of the property that you are intending to purchase.
Hence, you would need funds to bridge this unwanted gap. You can arrange for this fund via taking another loan or from your own savings. If that doesn’t work out, then select a property for purchase whose price is within the amount that you are getting as a mortgage loan.
So, keep these points in mind when you decide to mortgage your existing property in order to buy a home. Look for all options available for the mortgage loan, make an informed choice – and proceed on the road towards your new home.
