As the saying goes, money is not a panacea, but without money, nothing can be done. So when we encounter financial difficulties, we must try our best to make money. Housing mortgage loans have become a way for us to prepare funds, but we also must understand that loans are risky, and there is a lot of stuff that needs our attention.
Let’s take a look at the four things to watch out when you dealing with home mortgages:
Your credit history has to be good
The biggest difference between a home mortgage loan and other loans is that when the borrower has not repaid this loan for whatever reason, the bank will eventually make up for the economic loss by auctioning the mortgaged house. Therefore, when approving a home mortgage loan, banks pay special attention to the credit history of the borrower and generally choose a creditworthy one to cooperate. If you have more than 3 consecutive overdue within two years, or cumulative overdue over 6 times, it will be difficult for you to apply for a home mortgage.
Can you mortgage a property in someone else’s name
The real estate provided by the borrower under the name of others can also be recognized by the bank. However, to avoid legal disputes, when real estate mortgaged in the name of others, the consent of the owner must be obtained, and all relevant declaration materials agreeing to the mortgage must be issued at the same time, so that the bank can not doubt about the legitimacy of the whole operation. If you try to take a house mortgage without the owner’s approval, the bank will reject your application.
Realizable value of mortgaged property
Generally speaking, the real estate mortgaged to the bank should have the realizable value, otherwise, the bank will not accept your application. For example, you plan to take a house that is about to collapse in more than 40 years to mortgage to the bank It will be strange if the bank give you a loan! Mainly, if the house does not have any realizable value, it is impossible to get approval from the bank.
Do you have adequate repayment ability?
When approving a loan, the bank will consider whether the borrower’s credit record is good and whether the borrower has sufficient repayment ability. Therefore, if you don’t have a stable job, and you can’t provide income or work certificate, you will be considered by the bank as a person with poor repayment ability, who doesn’t have the qualification to apply for a house mortgage loan, or any other loan.
For many people who have never dealt with loans before, there are often many misunderstandings about the whole process. So what are those misunderstandings to pay attention to when applying for a mortgage?
Your home may be lost and you will have no place to live. Many people believe that once the house mortgaged to the bank and the loan is not available yet, the house will be immediately auctioned out so that the mortgagee will not have a place to stay. But in reality, it is unlikely to happen, because it takes at least a year for the house to be auctioned. If you are overdue for half a year, the bank will keep urging you. Only after six months without a response, the bank will give up urging you.
Mortgage loans can only be processed for the real estate registered by your name. In fact, according to the real estate mortgage loan policy, as long as the consent of the house owner is documented, the borrower can apply for a loan with a real estate by the name of another person.
Real estate that can be sold on the market for sure can be mortgaged. Not really. You should know that the risk control methods of different banks are not the same. Some pay more attention to housing and prefer buildings located in the city center. Some value the housing type rather than location, therefore prefer ordinary houses over office buildings or retail stores. It means if the mortgage house you are offering is not something that everybody wants, you have to look around to find someone who wants your property.
In this article, we detailed some common mistakes and misconceptions about home mortgages. Avoiding these mistakes is the only way to staying out of financial trouble. Perhaps, the best advice to keep in mind is if something seems too good to be true, it probably is.