If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem.
Home loans provide the thrust to residential real estate market in the United States. In the absence of home loans, a major portion of the population in any state would be compelled to stay in rental accommodations. It is because of these loans that one can be a proud owner of homes without the need for ready cash. Since they sustain the real estate market, not only home buyers but also developers depend on home loans. Home Loan Lending Norms Home loan financing's are available not only for the purchase of your dream house per se, but also to buy land and to construct a house on it. There are certain lending norms for home loans. A bank usually lends between 75 percent to 80 percent of the agreed value, and the borrower has to provide the remaining 25 percent or 20 percent themselves. The lending rate attached to a home loan depends on the state of the economy and liquidity in the market. Eligibility To qualify for a home finance from a home loan and mortgage company, a borrower needs to meet certain baseline requirements. Eligibility is determined based on the borrower’s employment status, duration of current employment, personal income, and credit status. The credit history of an intending borrower is the primary focus of lender banks. It is important to know whether the borrower has any record of default with other financial institutions. Factors such as pre-existing loans and types of property owned are also taken into account while considering eligibility for a home loan. Role of Insurance Policy in Home Loans These days, most banks in Texas, like elsewhere, require home loan borrowers to take an insurance policy under their name or one of their close relative’s name. This is a mechanism to protect such loans. This guarantees that banks get their money on time even if the borrower dies or is for some other reason incapacitated in servicing the loan. More Than Willing to Give Out Loans First-time borrowers may find all this complicated at first; however, availing a home loan is not that difficult. Banks will hand out loans to borrowers as long as they are eligible for them. Usually, banks depend on interests generated by home loans for their liquidity, and so they are more than willing to extend home loans whenever permissible. Loan Repayment If there is any challenge for the borrower vis-a-vis such loans, it is choosing the best repayment method and term. Still in such cases the terms and conditions vary from bank to bank. Therefore, it is better to look for a home loan that suits you the most before settling finally. Conclusion At any given time, there is a lot of ads on home loans and lending norms on TV and newspapers. If you are unfamiliar with the entire processes, it is advisable to consult a financial expert. This is particularly so since there are many legal aspects to consider as well while taking home loans. It is better to get it right the first time than to regret later on.
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AuthorDarrick encourages readers to post issues that need immediate attention in terms of home buying; such interactions will enhance reader engagement and provide a road-map for others Archives
November 2017
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