Check Out What All You Need To Get A Mortgage Loan!
Everyone dreams of owning a home that they have bought with their hard-earned money. Studies suggest that most homeowners find getting a mortgage as a convenient way to buy a house. If you are looking to buy a house and wondering how to get started, you have landed at the right place!! This article will cover all the mortgage basics so that you can have a clear picture of your affordability and what do you need to get a mortgage loan. Let’s get started!!
Contents
What is a mortgage?
Talking about mortgage basics, a mortgage is a type of loan given by private lenders or financial institutions. The loan is primarily used to buy or refinance a home. Mortgage loans are a convenient way to buy a house without having all the cash upfront.
Individuals who choose to buy a home but can not pay the total cost of a home out of pocket apply for a mortgage loan. Even if individuals have all the money required to pay for a house, they still apply for a mortgage loan to free up funds for other investments. However this case, you must meet specific mortgage eligibility requirements to get the loan granted. Briefly, you must have a stable source of income, decent credit score, and a debt-to-income ratio of less than 50% of above 750.
What documents are needed for a mortgage?
The borrower is required to furnish a few necessary documents in order to avail of a mortgage loan from the lender. Below listed are the essential documents borrowers are required to submit:
- Income documents(whether salaried or self-employed)
- Proof of identity(PAN card, Voter ID, Passport, etc.)
- Address proof(Voted ID, utility bills, etc.)
- Property documents
Note that if you are a self-employed individual, you must submit the last six months’ account statement as proof of income. On the other hand, salaried employees can submit their salary slips, IT returns, etc.
How does the mortgage process work?
Loan Approval
Initial loan approval from a mortgage lender is necessary before you start exploring different properties. Getting approved upfront allows the borrowers to know how much they will qualify for. This helps the borrowers not to waste their properties looking for properties that are outside their budget. The initial approval process requires the lender to verify your proof of documents and associated paperwork so you can make a strong offer. After the validation of documents, the lender verifies income, assets, and credit upfront to build confidence that you are a genuine buyer.
Finalizing The Property
After getting the loan upfront approved, the fun part begins!! It is time to get in touch with a reputable real estate agent and start searching for properties in a suitable location. The real estate agents are professional experts that help you to find the right property considering your requirements. They also help negotiate the prices with the seller and are well equipped with knowledge and experience to handle all the paperwork and details.
Loan Closing
Once the mortgage offer is accepted, and the loan is fully approved, you, along with the seller and real estate agent, can meet and close the property deal. During the closing and taking ownership of the home, you are required to pay the down payment and closing cost and sign off the final home documents.
Apart from starting off with the mortgage process manually, you can also apply for an SBA loan application online and start the process virtually!
