Visit several banks and financial institutions
to shop for the best deal. You are advised to check your pre-qualification
before starting to look for a home. To streamline the search process and improve
your chances, you should pre-organize your financial documents, as they will be
needed by the financial institutions in processing your application. Among the
documents needed are:-
a. J Form .
b. Salary slips.
c. A
photocopy of Identification Card
d. Current/savings account statement or
passbook.( if applicable)
Shop for Loan
You are
advised to compare loans thoroughly before application.
- Compare at least five financial institutions.
- Think about your repayment ability and consider taking a part-loan-part-
overdraft facility. Although the interest rate for overdraft facility may be
higher than fixed term loan, it offers the flexibility of withdrawal at the time
you require. Moreover, as the repayment period is not fixed, you could repay at
any time thereby saving interest in the long run. Most banks offer up to 50%
overdraft facility.
- Do not focus solely on the interest rate. Getting a low rate is important,
but you will not benefit from it if you have to pay too much upfront
fee.
- Think about how long you will keep the loan. If you are going to move out in
a few years time, consider a loan with low initial rate which accelerates
gradually towards the later part of the loan period since you may be able to
sell the house before the rate gets too high. If you plan to stay longer, a
fixed-rate mortgage may be an attractive option because your rate stays fixed
for the term of the loan.
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Get
Pre-Approval
Get pre-approval for a loan before you start
shopping for other options. If you take the time to get pre-approval:-
- You know how much you can borrow, so you will not waste time looking at
properties you cannot afford.
- You have the edge when you make an offer, because the seller knows you are
likely to get a loan and close the deal.
- You save time on confirming your loan, because you have already assembled
your paperwork.
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Apply for a
Loan
To
improve your chances of loan approval:-
- Fill out the loan application completely. The lender's needs all this
information to determine your creditworthiness.
- Respond promptly. Do not put off responding to lender's request for
additional documents. Get the documents yourself and hand-deliver them.
- Do not go on a spending spree immediately before the sale is scheduled to
close. The lender may check your credit report for credit card balances and your
bank accounts to make sure you have not drained them.
- Make sure the appraisal is done properly. The lender will order an appraisal
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Closing
the Loan
- After your loan is approved, the lender will draw up formal loan documents
and handle other details. Always review the loan documents. Do not be afraid to
ask questions or to refuse to sign if the agreement contains onerous terms. Once
your signature is on the loan papers, you are committed to abiding by their
terms for the next 15 to 30 years.After the loan documentation is finalised and
signed, the bank will still need a week or two processing time before they can
disburse the loan.
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