Buying a home is a huge decision, and you need to think carefully before you take the plunge. The first rule of the purchase of a home is getting approved for a home loan in Perth for example. If you have any semblance of experience in getting loans, then you are sorted. However, if you don’t, then there is much that you need to learn. From taking care of the paper work and wading through unlimited formalities to clearing your credit history, there is a lot of work to be done. Here is what to know before you take a home loan

Things to consider when applying for a home loan

Credit History

It might not always be possible to have an excellent creditdfsdfsdfdsfsdf history. However, by simply keeping on par with your credit card bills and paying off existing debts, you can go a long way. The lender will carefully review your financial records, paying close attention to the debt you are responsible for paying each month. The loan amount will be then be compared to your monthly income, which will be your debt-to-income ratio (DTI). Based on this rate, your lender will help pick you a suitable loan program

Pick the Right Plan

Many people commit the mistake of choosing a one-year-adjustable loan plan. It might look like a profitable deal initially, considering the rates are so low, but what you don’t know is that the rate quickly hops up the following year, leaving you in a fix. Instead, consider delayed adjustable or two-step-mortgage plan where the rate automatically gets adjusted to “fixed rate” after a period. It is less risky and covers you against uncertain future.

Negotiate

You know the general thumb rule to follow, right? Shop around, get the rates and compare prices. Here is another quick way to compare rates. Simply, ask your lender for the rate card. Listed on the card will be financial products with lowest interest rates. Compare the rates, and you will get the deal you want.

Check the Documents

dfgdfgfdgfdgWe cannot emphasize on this enough. People are so tired of dealing with the never-ending documents that they can’t wait to sign the dotted lines to get it done and over with. Carefully check the documents to ensure the terms mentioned are same as negotiated and agreed upon. In the case of doubts, don’t hesitate to ask.

Loan Tenure

The longer the tenure, the lower the EMI and lower the tenure, higher will be the EMI. People usually go for longer loan tenure as the EMI’s are more affordable. Before you jump at a decision, remember that in long tenures, you have to pay higher interest, which further pushes up the cost of the property.

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