Buying a home is one of the most important economic decisions that a person makes throughout his life. The advice below will be helpful to anyone looking to buy a house, no matter if it’s an experienced buyer or a person looking to get his 1st time home buyer mortgage , so please pay careful attention to every detail in this article and follow our advice to the letter.
Looking for the mortgage before knowing which home to buy has the advantage of knowing which property it is possible to acquire based on the mortgage offered by the bank.
The bank establishes a series of requirements when granting a mortgage:
With this information, the bank determines the amount of money it can lend and helps the future owner calculate how much he could pay for a home. Therefore, having the advice of a professional is key throughout this process.
From here, the future owner has greater certainty about the capital that can be allocated to the purchase and how far he can negotiate the price of the home if necessary.
Searching for a mortgage beforehand speeds up access to financing since some steps have been taken prior to its formalization. In, addition, it allows the sale of the home to be closed in less time, something very important in the event that, for example, there are other interested parties in the property.
There are also occasions in which buyers look for housing first, rather than financing, since they are unaware of the value that a mortgage advisor can provide in choosing the property. In this case, there is a risk that once it has been decided which home to buy, when applying for the mortgage, the requirements to obtain the necessary financing for that operation are not met. It is important to keep in mind that the buyer must have savings that cover 20% of the price of the property, since banks grant financing, at most, up to 80% of the appraised value. To this amount of savings must be added between an additional 10% and 15% to cover expenses such as taxes or the notary, among others.
In the event that the bank decides not to grant the mortgage, the person may face not only the problem that the seller ends up finding another buyer for the property but also, if there’s a deposit agreement or a contract of reservation, the money previously paid could be lost. For this reason, it is essential to have a mortgage advisor who helps to carry out a preliminary analysis of the personal financial situation and provides guidance on which mortgage can be accessed to finance the desired purchase.
Experts opt for first seeking the mortgage with the bank so that, once the economic solvency and payment capacity of the future owner is known, it is determined what financing to have. In this way, it is possible to establish a more realistic budget for a house, taking into account all the associated expenses, beyond the purchase price.
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