Buying a home is something that consumers should never rush into. Prospective home buyers should take their time to carry out the necessary market research and shop around before making a decision. There are two main tasks that prospective homeowners have to complete. First, they have to find the right home to purchase. This will depend on their needs. Secondly, aspiring homeowners should search for the most suitable home financing for their unique needs. With the right financing, the process of buying a home will be half done. To get the best results, aspiring homeowners are advised to always consult a competent real estate agent and a reputable mortgage broker. At Tundra Mortgage Brokers, you’ll find experienced professionals who can help you find the right financing for your needs.
Table of Contents
Guide to Applying for a Home Loan
Step 1: Find the Right Lender
Finding the right lender is the most important step in the process of securing a mortgage or secured home loan. There are many lenders out there, and they all claim to be better than the others. That is why consumers need to do their own research to identify lenders with the best home loan products. While it’s possible for the average person to find a great lender, this is a job that should be left to professionals. There are many loan brokers in the market who can help you with this. These brokers have the time, manpower and the technical know-how needed to scour the entire home lending industry to identify the best lenders. They can also compare the features, terms and conditions that come with the home loan products being offered by different lenders to ensure you find the best home loan for your needs. visit here
Among the factors to be considered when comparing lenders or mortgage products is the mortgage interest rate offered, down payment required, loan processing speed, mortgage insurance, processing fees and processing speed. The ideal lender should charge the lowest processing fees, interest rates and insurance premiums. They should also have a low-down payment requirement.
Step 2: Submit Your Application
After identifying the right lender or the right home loan product, the next step is to submit your application. You can do this in-person or through the lender’s website. Most lenders nowadays accept online applications. You can also submit your application through a licensed and authorized home loan brokerage firm. You will need to provide detailed information about your employment, personal details and personal finances to have your application approved.
Step 3: Pay the Down Payment
After submitting your application, the lender will approve it under condition that you find a qualifying property. The ideal property should be in good condition and have a selling price that’s below the preapproved mortgage limit. Be sure to check the mortgage requirements set by the preferred lender before making a decision.
Once you have found the right property, you will be required to pay a deposit. This down payment is usually a percentage of the negotiated selling price. This is usually 10%-20%. If a property is valued at $600,000, and the lender requires a 10% down payment, you will be required to come up with a $60,000 down payment.
Step 4: Sign the Necessary Paperwork
After making the down payment, the lender will finalize the mortgage contract and have you sign it. Usually, consumers are advised never to sign any legally-binding document without first seeking the advise of a lawyer. This will help to ensure everything is in order. The lawyer can also explain everything the contract entails.
Once the paperwork is done, the lender will transfer funds to the seller, after which you can take possession of the house and move in immediately.
Applying for a Secured Home Loan
If you own a home that is fully or partially paid for, you can access secured loans from most lenders. Usually, you can access 70-90% of the equity you have built up in the property. If you fully own the house, you can get 70-90% of the current market value of the property. However, the loan to value ratio will differ from one lender to the next.
Requirements
– Title to the property
– Personal details
– Employment details
– Loan amount you wish to borrow
If you have proof of income either from business or from employment, most lenders will be willing to offer you a secured loan with your home serving as the collateral. The term of the loan will depend on your personal preference, ability to pay and the T&Cs of the lender.
Applying for a Secured Home Loan Online
Nowadays, most loan applications can be competed online. This is convenient for both the lender and borrower. The lender gets information in digital format, which is easy to process, while borrowers can submit their applications from the comfort of their homes or offices.
While interest rates on secured loans may be lower due to reduced risks, processing fees are usually higher due to valuation costs, insurance costs and other upfront costs. The credit rating of applicants is usually considered when calculating interest rates. A high credit score will entitle you to lower rates of interest.