A housing loan is finance used to purchase a house. When you get a housing loan you offer your property as security to the lender. Upon failure of repayment, the bank will have the right to repossess the house.
What you need to know about housing loans:
Being eligible for a loan and the ability to afford the property aren’t necessarily the same thing. Housing loan eligibility is based on gross income.
Home loan lenders don’t usually finance the total cost of the property, so it’s always wise to save up a sizeable deposit before you apply for finance. By contributing a larger deposit, you get a reduced loan amount and get better terms.
The loan tenure typically ranges between 10 to 30 years and the housing loan amount you‘re granted may depend on your age and your income. The interest rate can either be fixed or variable.
It will also depend on the level of risk associated with you.
Tips for getting the best housing loan:
Get your finances in order
Before you apply, make sure that you check your credit record. If you have poor credit, take some steps to improve your credit score.
Use a mortgage calculator to work out what repayments you can afford
Take advantage of improved technology by making use of online calculators. This will give you a better idea of how much you can expect to pay for your housing loan.
Save a big deposit
To benefit from the best housing loan, make sure that you save a big deposit. This way, you’ll pay less in the long run.
Choose a loan that is best for your needs
Don’t sign up for a housing loan that you can’t afford.
Read the fine print
Make sure that you understand all the terms, conditions and fees.
Check that your credit provider is licenced
Only apply for a housing loan from a registered credit provider.