Loans are ubiquitous, as they are entwined with dreams. People apply for loans when they have some cherishable dreams. With the government’s renewed focus on boosting the economy, loan interest rates are at their multi-year lows.
Despite interest rates being down, financial institutions are wary about disbursing loans due to risks of loan defaulting. The best way to dodge this problem is to apply for a mortgage loan. Mortgage loans are approved faster than many other loans because of its inherent security.
This article tells you the top-5 things you should do to get a mortgage loan instantly at attractive interest rates.
Table of Contents
Improve Your Credit Score
A credit score is to a mortgage loan what capital is to a business. Just like having more capital in hand allows you to spend liberally on business expansion activities, having a credit score above 700 can set you one step forward in securing a loan. Just in case your score is below 700, look for hacks to improve the score before applying for a mortgage loan.
The credit score also plays a major role in deciding the interest rate of your mortgage loan.
Calculate Your Affordability
Generally, lenders offer up to 60% of your property’s market value as a mortgage loan. You may avail of the loan by paying 20% of your total loan amount as a downpayment.
As a smart borrower, you may stretch your finances a little and pay as much amount as you can as an upfront fee. Doing so will enable you to pay back the mortgage loan well before the extreme deadline, and avail the benefits of a lower effective interest rate. Lenders prefer issuing loans to someone who shows the intent to pay back the loan earlier.
Get Your Mortgage Loan Preapproved
A loan preapproval works wonders during the approval of a mortgage loan. Lenders use the preapproval stage to get close to your property and your financial profile. Depending on the property’s valuation and the stability of your finances, the lender discloses the loan terms and conditions.
On your acceptance of the loan terms, the lender preapproves your loan. Getting a mortgage loan becomes easy when you have a preapproval letter.
Clear Off Your Existing Debt
Lenders look at your debt-to-income ratio and calculate your repayment capability. That being said, the two most important factors in determining your mortgage loan eligibility are monthly income and monthly liabilities.
By clearing off your existing debts, you can bring down the monthly liabilities component, which would set you off to a right start in your mortgage loan application process.
Compare a Few Lenders
Present-day mortgage loans are flexible. You should browse a few reputed lenders and choose the one that gives you the best mortgage loan interest at attractive terms.
Generally, all reputed lenders offer a loan repayment tenure of up to 20 years and interest rates in the same range. When choosing the best lender, you should go beyond the conventional and look at their service delivery model, which includes faster loan processing time, doorstep delivery, best interest rates, and flexible repayment tenure.
Getting a mortgage loan becomes easy when setting yourself off to the right start. To know which lender can offer you the best mortgage loan features study various lenders and then decide which will suit you best.