The basics of mortgage loans

The way that a mortgage loan is when you approach a bank to borrow money for the purchase of the property, the bank pays the full sum and you are now liable for the repayment of that sum with interest. If a lending institution approves a mortgage loan application you will sign a contract stating the terms of the agreement. The maximum length of time that you can pay back a loan in is 30 years and interest is charged on the outstanding amount.

Qualifying for a mortgage loan:

Qualifying for your mortgage loan is an important part of the mortgage loan process. Being aware of what lending institutions look for when deciding about a loan gives you an advantage over other applicants.

• The first and foremost thing that a bank will look at is what size loan you can afford; can you afford the monthly repayments? This is generally determined by a third of your joint salary; if the mortgage loan monthly repayments exceed a third of your joint income you will not qualify for the mortgage loan you applied for.
• Secondly if you can afford the monthly repayments the bank will do a detailed credit check. Depending on the health of your credit history will firstly depend on getting approval and secondly on the size of the mortgage loan you qualify for. If you have a negative credit history you might not qualify for the size loan that you seek. Credit checks include current income, employment history and debt and payment history, the bank will require bank statements, payslips and statement of assets and liabilities.
• The bank or lending institution will appoint someone who will do an assessment of the property that you would like to buy and see if the property is worth the mortgage loan amount. Make provision for a valuation fee which can range from R1000 to R3000 which determines whether or not you can get approval.
• Finally if all this is done and the bank is satisfied that you qualify for a mortgage loan your loan will be approved. The interest rate of your loan will depend on the length of the term of the loan and will also be dependent on the risk that you pose to the bank. The higher the risk that you cannot repay the monthly installments the higher the interest rate on your mortgage loan.

To facilitate your mortgage loan application process it is wise to make use of the services of bond originators such as CKM Homeloans. Bond originators are a go between for you and the bank; bond originators shop around to get you the best mortgage loan package. A bond originator can negotiate better interest rates for you and the approval process is a lot faster if you make use of such service. The best benefit of all is that there is no cost involved with a bond originator as the bank pays the originator and not you.

So for the best chance of getting the best interest rate and the best mortgage loan package without spending lots of your time and money contact CKM Homeloans who will facilitate your mortgage loan application process from start to finish.