Housing Loan

To own a home is not a cornerstone of wealth, it is something that gives families a feeling of emotional security and stability. To complete this dream, one should always look for a housing loan. But this seems to be a disheartening task. So, solving this problem there are few steps given that you should follow:

How to Apply for a Home Loan

  • Inquire about the branch’s website and toll free number and fill the application for home loan.
  • The required documents are identity & age proof, income proof, residential address proof and details of obligation with the statement of accounts.

Sanctioning of Home Loan

  • The bank will determine the financial eligibility of the client and then they will evaluate the property.
  • The lender carry out the legal verification to ensure that their property is free from any legal issues.

Disbursement of Home Loan

  • The agreement of home loan is signed. Only thing done is the submission of original documents of property and the post-dated cheques.
  • The lender will issue a cheque in the favor of builder or seller. This is known as disbursement. EMI starts from the date of disbursement.

Prevention in taking Housing Loan

If you do not want to face problems in paying mortgages then there are some simple steps that you should follow:

  • Start sooner: The early you will take action, the more are chances to save your home. If you have enough time then contact the services provided in a bank when you first experience a financial difficulty.
  • Pursue Help: It is best to take help from an expert to modify mortgage. The free help is provided by federally approved housing counselling agencies and non-profit organizations in legal services for home owners.
  • Strip with it: The main key is endurance. The modification in mortgage process should be done quickly and upstanding but in real this can take months to complete. You have to keep a copy of every documents that you have submitted in bank as banks may ask you to submit the copy of same documents many times. Do not lose hope and keep in touch with the lawyer or housing counselor.

Some kinds of Workout Agreements that banks may offer

  • Forbearance: The short term agreement that allows home owners suspend their payments for a temporary period without the risk of foreclosure. In this agreement, the payments are just postpone for a short time but not be forgiven. By the end of forbearance, you have to work out with other agreements like repayment plan or modification to catch up with the loan.
  • Repayment Loan: In this plan, the past payments are divided by bank in the coming number of months. You have to pay this amount along with the regular payments. These plans work for those who had a short disruption in income works for a small number of homeowners and redeemed enough to pay some amount of extra in each month.
  • Modification: In the process of loan modification, the bank will change some terms in your loan to make your payment more affordable for you. This includes reduction in interest rates, reduce your part of loan, previous payments back into the loan or reduction in part of the balance of loan. This can also extend your loan for a long period of time.

Myths & Facts

  • If you are pre-qualifying the criterion of loan application then you are guarantying the amount of loan.
  • Fixed rate mortgages are fixed for thirty years always.
  • If you want to save money, then give it on rent.
  • You should pay mortgage as early as possible.
  • You don’t get a good loan unless you have a down payment of 20%.

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