A mortgage loan is a great opportunity to purchase a property for those who currently lack the financial means. It is a loan with a purpose, which is available for purchasing a house and is provided by the credit institution (bank) under a contract. In accordance with this agreement, you agree to pay the monthly amount set by the bank until full repayment of the debt.
Nowadays banks offer a variety of different mortgage loan programs from which you can choose the one that is right for you. If you do not want to or find it difficult to make sense of all those offers - a fixed or variable rate of interest, the legal nuances, etc., then you can contact your real estate broker, who will explain these programs to you and help you make the right choice.
Getting a mortgage
It is very important to carefully study all the available information about a particular credit institution before applying and starting negotiations to receive a mortgage loan. Don't be shy to ask the questions that are important to you. If something is bothering you, make sure to discuss or comment on it. Get recommendations from regular clients or clients who were satisfied with the services of this institution.
There are several ways to minimize the risks when arranging a mortgage loan. You can arrange it through your real estate broker or apply directly to a bank or another credit institution. Denis can help you get in touch with reputable financial institutions.
Many real estate buyers prefer to arrange to finance before starting to look for a house that will match both their personal and financial needs, and most credit institutions can confirm your ability to get a mortgage loan up to a certain sum. This information helps the buyers focus on offers that match their plans and budget. In the opposite situation the result is not guaranteed and nothing can upset both the buyer and seller more than a cancellation of a deal due to lack of financing.
How to apply for a mortgage loan?
A lot of factors weigh in on your ability to get a mortgage loan, but the most important one is your credit history. “White spots” or negative ratings can cause a higher mortgage rate or lower the potential sum of your loan.
Before giving the “go ahead” to issue a mortgage loan, banks will attempt to get as much information as possible about you (and sometimes about the property that you & #39 are planning to purchase) in order to understand how risky the deal is for them. Usually, they will ask you to provide the following information about yourself:
- Name and address of your bank branch, your bank account numbers and bank statements for the last 3 months.
- Three months’ worth of bank statements of your capital investments.
- Documents that prove your income (pay stubs from your employer).
- Income tax declarations and balance statements if you & #39 are a business owner.
- Account numbers and the amount of debt that you may have on credit cards and credit lines.
- Your official (signed) agreement that would allow the bank to access your credit history and verify your bank accounts.
- Afterward, you are to send your mortgage loan application to the bank along with all enclosed documents, and at this stage, the bank will carefully verify all the information that you have provided and decide whether it will grant you the loan.
Depending on the mortgage loan offer and other factors listed above, this process can take from 1 day to several months.
In the event that your application was approved, the bank will provide you with information about the offered mortgage rate, additional payments, costs of maintaining the account and offering the loan, as well as your monthly payment amounts and payment schedule.
The property that you are purchasing will serve as collateral for the mortgage loan, which is why before concluding the deal the bank will arrange for an expert assessment of the market value of the property. The loan amount will be equal to a percentage of the property value. If the initial down payment on the mortgage is less than 20% of the cost of housing, the mortgage will be additionally insured.
You can get a consultation from Denis about mortgage loans by sending a contact request through this website or call him at 514 577 0787