Ravi Chandran
Mortgage borrowing is not really a science, but lenders look at several factors before they dish out cash to you
Surveys indicate that a large number of potential home buyers count themselves out of the market because they are unsure os mortgage borrowing.
Widely-held myths about home financing also cause some to be doubtful about borrowing to buy a house. Some of the most popular myths include:
- home buyers need large down payments (more than is actually the case);
- the loan process works against younger people with insufficient upfront capital to be used for down payment;
- owning a home is more expensive than renting one; and
- with the higher Additional Buyer’s Stamp Duty (ABSD) and Loan-To-Value (LTV) checks, the chances of getting a mortgage are almost impossible.
Many qualified first-time buyers are also unaware of special programs designed especially to make a home affordable to them.
Several surveys have found that many people view the mortgage process as “difficult, stressful, and incomprehensible.” The home loan industry is always looking for new ways to dispel these myths because lenders want more business, not less. The alternatives to traditional 20% down, thirty-year fixed mortgages is astonishing. Mortgage brokers are experienced in explaining today’s financing and debunking the myths.
If you have found the perfect home in an area that you like, but are finding the perfect financing has become elusive; If after you completed the application process, your lender has turned you down, and you are upset; Can anything be done to turn around this setback?
It depends on why you were turned down and why you are not approved for mortgage borrowing.
If your income is too low to satisfy one mortgage company, there might be another company with more liberal qualifying guidelines. If you have had credit problems, some lenders may be more willing than others to help you clear them up in a manner that satisfies their underwriters.
If your loan runs into problems, sit down with a mortgage broker to investigate the possibility of using a different lender. The first company may be able to “assign” the package to a competitor, enabling you to use your same credit report and appraisal. You will need the cooperation of your sellers, too. While loan rejections are disappointing, they can have happy endings.
When searching for mortgage borrowing leads, there is no harm in asking lenders or brokers if they can give better terms than the original ones they quoted or than those you have found elsewhere.
A home loan often involves many fees, such as loan origination or underwriting fees, broker fees, and closing costs. Every lender or broker should be able to give you an estimate of its fees. Many of these fees are negotiable. Some fees are paid when you apply for a loan, and others are paid at closing. In some cases, you can borrow the money needed to pay these fees, but doing so will increase your loan amount and total costs.
Once you are satisfied with the terms you have negotiated, you may want to obtain a written lock-in from the lender or broker. The lock-in should include the rate that you have agreed upon, the period the lock-in lasts, and the number of points to be paid. A fee may be charged for locking in the loan rate.
This fee may be refundable at closing. Lock-ins can protect you from rate increases while your loan is being processed; if rates fall, however, you could end up with a less-favorable rate. If that happens, try to negotiate a compromise with the lender or broker.
If you are looking for good mortgage brokers because you are ensure of funds availability for purchase, trusted mortgage consultants can set you up on a path that can get you a home loan in a quick and seamless manner.
Good mortgage consultants have close links with the best lenders in town and can help you with mortgage borrowing and help you settle for a package that best suits your home or commercial purchase needs. You should also find out money saving tips.
Whether you are looking for a new home loan or to refinance your existing one, a Mortgage broker can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all their services are free of charge. So it’s all worth it to secure a loan through them.
