Home mortgage

Home Mortgages – The Best And Safe Loans For Acquiring Assets

When comes to buying a new house or a piece of land, there are many options for financing this act. There are banks that lend different types of loans with different interest rates and features; individual lenders who generally have their interest rates a little higher and sometimes the real estate owners themselves come with financing options by having tie-ups with one or the other financial institution. But amongst all the best way to do this would be going for a mortgage loan since the rates of interest are considerable, affordable and the terms are also a little flexible.

While going for this type of loan, the borrower need not fear the loss of property or any damage to it since it is the same he is going to mortgage that which is going to come back to him once he finishes his debt promptly and without any defaults. These mortgage loans are given for all types of borrowings and this is considered one of the best for home loans. Home mortgages need not be necessarily for any new or fresh purchase; this can also be availed for renovation or refurbishing purposes. Now here there are two types, you might either remortgage or upgrade the existing mortgage or take one if this is going to be your first shot.

In the latter case, it is very easy. You will have to present the estimation for the planned work to the lender or the bank, from who you are intending to avail the loan and on their approval you can go ahead with the work. This approval is given to you based on certain criteria like your healthy credit reports, strong bank statements etc… In the former case, it is a little tricky. Take for example you are already holding a loan worth two hundred thousand which is spread on a 5 year interest period. Now you are going for a remortgage after completing two years of your loan period. Here your loan might either get approved or rejected and this is done in the following manner.

  • The bank will first look into the estimations given by you and your architects and have a personal check at your place to find out the real value of the work. Then this is checked with the real value of the house which in turn is checked with the balance loan repayable amount.
  • Here the bank might either approve the estimated amount or might make changes depending upon their calculations during the personal visit. In most cases, this amount goes down in the estimation which in turn means that you will not get want you had actually expected from the lender.
  • In most cases, the whole process gets rejected if the lender feels that the borrower is a little poor in making his repayments or if he has defaulted two or three times in his payments style.

Generally, these additions or renovation come in the form of either extending the house by a room or two, modulating the existing kitchen or adding a deck. More than half of the population goes for a mortgage loan in this case but the mistake they do here is opting for a longer repayment term. This is of course very comfortable reducing the payment burden on the borrower but most of them forget to understand that before they finish their debt, their house has already lost its new shine and glitter. Yes, imagine if your repayment is fixed for 10 years, do you think the house will look the same as it was when it was painted at the end of the tenth year? No, definitely not, by then it would have definitely called for at least two or three repainting which is again a monstrous task. So you will be pushed to upgrade your mortgage each time only to increase the burden on your back.

But even after this if you feel that mortgage is the best option for you, then do it but smartly and wisely. One way of doing this is by increasing the monthly payments from the promised terms and conditions and trying to finish the existing loan early giving a good payment record to the lender. Some of the easy methods of renovating your house are;

  • Cash – the best and the safest method of renovating your house. Why the hell should you go for improvements through borrowings when you do not have cash in hand? This is certainly not important. If you cannot shell out pennies from your pocket do not do it but wait until you accumulate a reasonable amount. Another option is, for whatever is possible for the money you have in hand, prioritize the work and do them one by one as cash flow improves.The other option is the need of Home Improvement for Home Owners to Mortgage property.
  • Mortgage refinancing – this is fine for those who do not go for an extended period of credit. A mortgage is actually a good option when you are getting a loan for they offer lower rates of interest when compared to the others. Hence this becomes one suitable option for all types of customers.
  • Credit cards – this is one good option for those who have a good credit repayment history. Yes, if you intend to do a small renovation, this is the best option provided your credit agency approves your credit amount. For this, the most important requirement is a good credit back up. Once this is approved, the credit amount required for the housing project comes to your account.
  • Construction loan – this is applicable to those who want to make big additions like extending the roof, building two or three extra rooms etc… But these are not found with all the banks and even if you find one, there are a lot of formalities and pre-requisites for acquiring this.

Let the situation be any of these, it is always advisable that you go for a better and upgraded house rather than making renovations for this sounds to be a good option for mortgaging and you will be in a better position to get a loan for the whole house goes to the mortgage.