How to choose a suitable mortgage loan? | what to consider?
A mortgage loan is a medium or long-term loan that is normally approved for the purpose of reconstruction of the home, expansion, purchase, repair or some other purpose. In this situation, the property remains as collateral for the bank. Since he is in charge of the cash loan, a financial institution can also make this loan. Since it is a very large sum of money, the terms can vary from 5 to 20 years, with the interest that each institution manages.
A mortgage loan also has the possibility of being used for various purposes, which means that the borrower decides the purposes for using the money and in this case the property must also remain as collateral for the lender.
How to get a mortgage loan?
When requesting a mortgage loan, the financial institution will evaluate various variables for authorization, in addition to compliance with the mandatory variables that must be evaluated by law., it is necessary to request some data to verify the borrower's credit situation and guarantees, as well as the payment capacity, on which the conditions under which the loan will be granted will depend.
Some of the most common requirements are:
- Copy of the last pay stubs
- Copy of your employment contract
- official identifications
- If you are an independent worker, documents that prove your income
- Accreditation of other assets of your property such as: cars, shares in companies, real estate, etc.
- As the purpose is a real estate purchase, all the background information of this house will be requested to verify that it is in the name of the debtor and put in the name of the bank.
It is important to mention that each of the credit institutions has autonomy for its valuation parameters, that is to say that although it must evaluate the borrower with the legal parameters, the same institution can also add those that are considered important.
5 Tips to get a mortgage loan
Have a good credit history
The institutions will always look at your status and credit bureau rating to know your behavior as a debtor, which is one of the most important parts to get the credit.
Have how to check your earnings and consider if your salary is proportional to what you must pay
A financial institution clearly needs to know that you can sustain the payments month after month, therefore having a low salary will not help your approval since it is more likely that due to this circumstance you will not be able to pay at some point.
Age It is very important to be a candidate for the loan, being someone older will be less likely to finish paying it or to continue working and considering that the loan terms are very long, this is considered when granting it.
Seniority at work
It is recommended that you have a minimum of 3 months working in the same job.
Before applying for the loan, it would be beneficial for you to estimate your income and expenses in order to know your ability to pay and thus verify and choose the term that best suits you.
What types of mortgage loans are there?
Since the acquisition of a home Currently, mortgage loans may be the only option for most people who want to buy a property; financial institutions have to design different types of payment schemes that adapt to each client.
There are two types of payment schemes:
Mortgage credit with Fixed payments: In this type of scheme, the monthly payments will be the same for each of the months that the loan term lasts, this will help the family economy since it is an amount contemplated and planned from the beginning.
Mortgage loan with growing payments: This other type of scheme will have changing monthly payments according to the interest rate and are recommended for people with future plans who plan to increase the amount of the payment in the future.
Purposes of Mortgage Credits
|Acquisition Mortgage Credit||For the purpose of acquiring a new or second-use home.|
|Remodeling and improvement||Improve, expand or remodel the home and that same property remains as a guarantee.|
|Programs with housing institute||fovissste either Infonavit for a home that will be purchased together with the bank and the years of contributions of the person interested in purchasing it.|
|Land acquisition and/or construction||It allows to build the house.|
|mortgage transfer||Change the credit that you already had to another with better benefits.|
|of liquidity||For cash for the purpose that the borrower requires and a property is left as collateral, its acquisition rates are higher and it generates interest.|
How to choose a mortgage loan?
Being a great responsibility and a debt for years, it is necessary to know how to choose it and choose the one that best suits the borrower's possibilities, taking into account the following parameters:
- Know your situation: Know exactly what you can pay, for how long, if your job is safe and if you want and can assume that commitment.
- Have a considerable amount of savings: Have a proportional amount saved from the agreement to the total property you want to buy.
- Compare different factors of mortgage offers:
- CAT (total annual cost)
- Interest rate
- Terms and payment scheme
All these factors depend on the needs of the client and the offer of the financial institution, it is necessary to do a previous investigation to choose one because it is a great responsibility that is going to be acquired for a long term, remember that you can visit our Blog to know more about the subject.