Among the many promotional offers and seemingly attractive mortgage lending conditions, it is very difficult to find a really worthy loan option.
A mortgage is a long-term loan secured by real estate. The mortgage agreement obliges to return the loan amount and interest within the period established by the bank. In this case, the pledge is a guarantee of fulfillment of obligations.
Consider the risks
Real estate acquired with credit funds, after the transaction is completed, becomes the property of the borrower. But in the mortgage agreement it is stipulated that in case of default on the obligations under the loan agreement, the ownership of the collateralized real estate is transferred to the financial institution.
Mortgage lending is a crucial step, which involves fairly long-term payment obligations. Therefore, deciding on such a deal, you need to choose a suitable bank. In such a situation, many are looking for an option where you can pay less and get more. Unfortunately, this does not happen. Every financial institution finds ways to attract customers, but never lose. All banks' risks are minimized and are constantly under tight control.
So don't be fooled by low interest rates. It is better to take an interest in absolutely all payments that will need to be paid, except for debt and interest. And there are not so few of them: commissions, which are often divided into one-time and monthly, insurance premiums for real estate and the life of the borrower, payment to the property appraiser, expenses for a notary office. Only after finding out all the expenses associated with obtaining a loan, you can decide on the choice of a bank.
Banks also select suitable clients
Not only a potential borrower chooses the most suitable bank, but also a financial institution is attentive to clients. Each financial institution has its own parameters for assessing the borrower. The total family income, the age of the borrower, the presence of other real estate and vehicles are taken into account. The more the bank asks additional questions and requires supporting documents, the more chances are to take a loan on more favorable terms. And it also speaks about the reliability of the bank, because in this way the credit risks of the financial structure are reduced.
In addition, financial institutions, together with developers or insurance companies, often conduct various actions to reduce mortgage interest rates. But on average, you can profit in this way no more than 1-3% per annum. But there is a possibility that life insurance or mortgage insurance will cost more than elsewhere.
