If you’re reading this mortgage blog, you’re probably looking to buy a home right away or sometime in the near future. It’s an exhilarating time as you map out your budget, search for apartments in a location of your choice and plan the overall decor of your future home. But the most important thing to keep in mind is the type of loan you’ll avail and the steps prior to it.
Getting a mortgage can be a bewildering process, especially if you’ve never done it before. To make matters worse, there’s a lot of fallacious and outdated information out there.
In this blog post, we’ll debunk some of the common myths around mortgage so that you can be well-prepared and keep your eyes on the prize (your ideal home!).
Owning A Home Seems Challenging & Renting Is Cheaper
If you can afford to pay your monthly rent, chances are that you’ll be able to afford to make a monthly mortgage payment as well. To find out how much mortgage you can afford, talk to a qualified mortgage lender at your bank. You can even get a pre-qualification just to get a rough idea of how much money you could potentially borrow.
Seek The Lowest Interest Rate
Home loan interest rate should not be the only thing to consider when applying for a loan. It’s pertinent to keep other factors and costs in mind, such as LTV (loan-to-value) ratio, processing fee and loan tenure.
Good Credit Score Equals Guaranteed Mortgage
Of course, good credit score is a great thing to have when you’re applying for a loan but that’s not the only essential thing to keep in mind. Some of the other factors that play an imperative role in determining your credit profile are your monthly income, age, job stability, existing loans, and location of the apartment. Failure to meet any of these criteria may cause your home loan application to get rejected.
Nationalized Banks Are Better Suited for Home Loans
It’s true that nationalized banks may have more capital, which means a greater capacity to offer loans, but private banks tailor-make their loans according to the needs of the customer. Moreover, private banks may offer better customer service.
Paying Off Your Mortgage Quickly Is the Ideal Choice
We understand that you want to pay off your mortgage quickly, but that may not be the wisest financial decision for you. Instead of setting aside a big chunk of your income to pay as a mortgage each month, we suggest you invest that extra money for long-term returns. Also, by opting for a long-term home loan tenure, you will ensure that you never default on
EMIs during financial emergencies (albeit reducing your chances to get loans in the future).
If you’re preparing to buy a home, it’s important to educate yourself to avoid feeling browbeaten throughout the process. You can get in touch with us for better understanding and to separate mortgage facts from fiction.