Introduction
Home loan is cash advancement from the bank or building society to help individuals to buy houses. This money borrowed from the bank to purchase your house is repaid in monthly installments plus interest over a period of say twenty, twenty-five or thirty years depending on the mortgage agreement. If you want to buy a house through taking a loan from the bank you need to know the right banks that offer mortgage loans, best loan interest rates in the market and the required information during the application process.
History
Banks and building societies introduced this financial product to allow people to borrow money to buy houses. This helps individuals to raise the much needed money to buy houses which they cannot mobilize through monthly savings. The repayment terms of mortgage loans are spread over a number of years to help individuals to pay relatively low monthly installments.
Features
Home interest loans are offered by banks, building societies and other lending institutions and it is important to shop around for the best quotation before committing yourself. Home loans terms and conditions slightly vary from one bank to another, thus you need to first compare quotations from at least more than two banks. It is also important to deal with a reputable bank that has a traceable history and which is registered.
The information required when applying for a home interest loan include your personal details such as full names, residential address, age and any other property that you own. The bank require your monthly income and expenditure budget and payslip in order to determine the maximum home interest loan amount you are eligible to borrow. They also require the contract of employment as a point of reference to your source of income. The application process involve completing a home interest loan application form and forward it to the bank together with supporting documents such as copy of your identity document, copy of your payslip, copy of your contract, price indication of the house that you want to buy, the seller agreement as well as your credit history. The bank will determine the deposit amount you should pay which is generally ranging from 10% to 20% of the total cost of the house you are buying and the interest rate.
Home interest loans reduce the burden of raising a lot of money from your savings to buy a house but rather you will only raise little cash to pay for lawyer’s fees and for deposit. Once the home interest loan is authorized and all the paper work complete, you can move to your new house at the same time repaying the loan on monthly basis.
Tips and comments
Home interest loans help people especially low income earners with the much needed cash to buy houses which they cannot be able to raise from their savings. If you are dreaming of owning a house but you cannot be able to raise the much needed cash from your current income, taking a home interest loan is the best option available.
