Being able to buy a home is a dream come true for most of us, but rarely do we realize that it is followed by one of the most stressful periods in our lives. There is a lot of paperwork to go through, along with multiple trips to the bank if you decide to take a loan, which frankly most of us do! There are just too many questions in one’s head that need to be answered before getting the loan. So, having a list of the right questions to ask before settling on a decision is one of the soundest approaches and also so that you do not miss out on the options available for you.
What do you sign on?
- In simple terms, you sign two things while making the deal; the first is the mortgage or the part that contains all the financial details, the terms and conditions if or should one fail to make the payment.
- The second is your promise to pay back the loan or the promissory stating the EMI or the Equated Monthly Installment, the duration of the loan’s tenure, and/if any other repayment processes. You can easily calculate the EMI or the amount left to be paid using a mortgage loan payment calculator.
It is essential to go through the details carefully as missing or misunderstanding any might lead to difficult times.
The important questions to be asked:
What types of mortgages are suitable options for you?
There may be multiple suitable programs for you, and it is a bonus to you that you discuss in detail the benefits of one over the other and come to a shrewd conclusion. An example would be to check if the mortgage you are going for is a Fixed-rate mortgage or an adjustable-rate mortgage; the former, as the name suggests, has a fixed rate of interest throughout the term of the repayment while the latter has a rate of interest that adjusts according to the market. While both types have their advantages, it is better to get a professional’s advice before confirming.
Is there any qualification required?
This varies from one lender to the other, as each sets their standard for what they accept as qualification, keeping in mind several factors, including income, assets, liabilities, and credit score. Do not worry if one lender cannot provide you a loan based on your report; there are plenty of others that are willing to take you as a customer.
What should be my down payment?
After you have qualified for a loan, this should be your next question. While this fairly depends on your savings, there are still two things that you need to take into account. The minimum or the required amount or what is the best down payment for you. Your down payment directly affects the interest you end up paying; the higher the down payment, the lower the interest.