A – now a days the financial institution have become more cautious about the down payments…most of them ask for minimum of 20 % in advance but still there are certain banks who are ready to take 5- 15 % of down payments but they charge huge rate of interests than the one taking 20% on the down payment.
But there are FHA- insured loans which are given by government organizations that provide loans to the buyers who otherwise have optimal credit report but cannot afford the large down payments.
Another option is there for the borrowers who cannot pay larger down payments is a piggy back loan. In it 15 % is financed by the equity loan and the borrower has to pay just 5 % down payment.
Q – What all documents I need to provide to receive a loan?
A - lender will ask for last three years tax returns, past credit history, annual income records, other movable or immovable assets records, bill payments, current debts information, account number details , pay checks, passport, employer’s name and phone number etc.
Q – Can I pay off my mortgage loan earlier if I want to do so?
A – Yes, you can pay off your mortgage loans earlier as well but it depends upon the type of loan and usually they lender has specific lock in period before which you can not pay off the loan amount and clear your balance.
Q – What if I have less credit score?
A – You can still get a loan if you have lesser credit score by paying little extra rate of interest but it is always better to improve your credit score before applying for loan as this way you can receive a loan with lesser rate of interest.
Q – How can I investigate more about the lender before signing any contract?
A – Check out the license and certificates of registration of lender with the licensing office.
Check out company’s website and profile. Contact business bureau of the area in which the lender is located for its genuineness.
Q – How can I get minimum rate of interest?
A – One should shop around for the prices of different lenders. Borrower can also hire a professional (broker) for this work. After proper search and survey and comparing multiple quotes one can select a lender offering minimum rate of interest.
Q – How long can it take to receive the loan?
A – If all the documents are provided and verified then all this process may take about 2- 6 weeks of processing time.
Q – What does pre approval means?
A – Getting pre approval means to get commitment from the bank for loan before you have actually bought a home. It ease the borrower as he comes to know the approximate loan amount he is going to get so that he can search his house accordingly and hence saving time.
Q – Should I lock my rate?
A – This means to fix the rate of interest through out the term of mortgaging. This saves the borrower from sudden fluctuation of the market. No one can predict about market bt it is always reasonable to play safe.
Q – Is it safe to receive loan online?
A – The online company where you have applied may not be a real company. Be cautious while applying online and never provide the personal information till you are confirmed about the company’s authentication.