Most likely, buying an apartment will be your grandest purchase, but it is a fact that it is sometimes not easy to get approval from a lender for a mortgage. Often, future borrowers try not to ask unnecessary questions, to quickly get the approval the loan. It may turn out that the bank, taking advantage of this state of things, will be silent about the important components of the mortgage program. Do you understand what it is worth asking your mortgage consultant?
How much money can I borrow?
This will help you find out how much you can get, its minimum and maximum. You will understand whether it is worth further considering the proposal or whether you need to move to another, more comfortable, mortgage program. It happens that maximum sum is enough to buy real estate, and the necessary amount may turn out to be uninteresting for the bank. The mortgage plans of others, on the contrary, may be incommensurable with the capabilities of a financial organization.
How long can I repay a mortgage loan?
Duration of lending is standard and ranges from 1 year to 30 years. The discussion of this issue will be especially interesting for those who are looking for a shorter period or would like to find an option that allows you to make payments as long as possible. The answer to this question can be very important.
What types of interest rates does the bank use and what is their size?
You should get both information about the value of the interest rate and its type. Only consider options with a fixed interest rate. Choosing this option, you protect yourself from possible fluctuations in the economy.
What is the monthly payment calculation scheme supposed to be?
In most cases, the annuity scheme provides for the distribution of the debt burden on the borrower in the form of equal payments over the entire loan term. An alternative is differentiated payments, the size of which decreases as your loan is serviced, but will significantly exceed annuity at the initial stage. Such a scheme will significantly save your interest costs.
What is the down payment required?
The question will be especially relevant for those whose share of savings are small. If you use a housing loan due to the fact that your own savings are not enough to purchase an apartment you like, you can ask how the size of the down payment will affect the interest rate.
Is it possible to get a loan on favorable terms?
Today, some of the credit organizations are participants in the “state support mortgage” program. Another type of discount is provided to young families. The third group of benefits is the bank’s salary clients: this category has not only a low interest rate, but there is the possibility not to provide income documents. There are also discount programs for employees from the public sector.
Do I need co-borrowers and guarantors?
Lenders rarely establish, as a mandatory requirement, the need for a person applying for a mortgage to have a co-borrower or guarantor, but it’s worth to find out about the possibilities of attracting them to obtaining a housing loan. Why is this needed? Such assistants may be needed by those whose income may not seem sufficient to the bank – acting as a guarantor of a loan repayment or as someone who will make payments with you, they significantly increase the likelihood that they will approve the application.Confidence in the bank, guarantors and yourself is an important condition for obtaining and repaying a mortgage loan.
Insurance and property valuation?
It is important to pay attention to the contract with the lender. Mortgage banking insurance includes two main points.
- The first is insurance of an immovable property pledged by a creditor. In other words, the bank is insured against unforeseen circumstances: fire, flood and other reasons for the loss of the facility.
- The second item includes borrower life and health insurance.
The borrower cannot refuse the first insurance. But life and health insurance can be abandoned. Contact your mortgage manager for more details.