#5 Tips For Picking The Right Mortgage Loan'Paying up the debts you owe will boost your borrowing capacity'

Nothing satisfies more than owning real assets. At least, owning real property is ranked among the best investments if not the best. This is ideally for the reason that the value of real assets tends to appreciate and would hardly depreciate not unless compelled by forces beyond redemption.

Owing to this fact, many people often find it a worthy effort to apply for a mortgage loan. Well, some of the questions that come up in these circles are the guarantees that come with such a move. Is it automatic or are there some factors to consider when picking a mortgage loan?

显然,银行不会给mortgage without making some considerations. On the other hand, the borrower needs to establish what the right mortgage loan is, for them. As a result, there are factors to consider prior to arriving at this decision. Everyone wants to make the best decision when it comes to mortgages and would not want take a wrong move. So, what informs the decision by borrowers to pick up the right mortgage loan? Here are five tips to help you make the right application for a loan of this nature.

Improve Your Credit Score Prior to Borrowing

Many people want to pick up mortgage loan but are not knowledgeable about terms that apply in the process. One of the things you should be knowledgeable about is your credit score. This has a significant impact on the interest rates and the fees you will pay for your mortgage.

You can plan to improve your credit score before getting the mortgage loan. Update your payment records and stay current on the same. About 1/3 of your credit score is determined by your ability to make payment for your bills within the required time. If you owe a lot, your credit score will be negatively impacted, especially if you are late with your payments. Therefore, paying up the debts you owe will boost your borrowing capacity.

Shop Around Before Picking Up Your Mortgage

It is not wise for you to consult with only one financial provider. Don't hurry up to sign up papers just to get money without looking at the bigger picture. Open up your ears and eyes to hear and see the changes happening to interest rates.

Financial institutions calibrate their lending rates based on these regulations and therefore, it is important to go shopping for the best rates and settle for a cheaper loan where possible. A difference in percentage rate of payment will count a lot when checked at the end of the tenure.

Consider Your Income At The Time Of Mortgage Application

Your monthly repayment figure should always be about 1/3 of your monthly income or less before the taxes. It is highly advisable for you to make sure that your repayment is on the lower side. Lenders may qualify you for a huge loan based on the picture of your financial status. However, you need to be honest with yourself. How much is within reach for you? Make sure it is an amount that you will be able to pay each month without struggling.

确保Payment Term Is Not Too Long

Most mortgage loan tenure provided by major lenders around the world is 30 years. Well, a longer tenure will guarantee you lower monthly payments. This becomes very tempting for borrowers but think twice before pick up a mortgage loan to be repaid within a period of 25 years or even more. Don't be lured by the lower rates but rather, go for a mortgage that will take the shortest period as possible. While the monthly payment rates may be low, your actual total repayment will be enormous. For example, a 10-year loan may accrue an interest of about 50% whereas one doubling the tenure period may accrue interest of up to 120%.

Consider Your Family's Total Income

Yes, your ability to borrow and the amount to pick up for a mortgage loan are heavily determined by what your family earns as a whole. Therefore, it is important to discuss the move with your family since its repayment will affect the general finances of your household. A mortgage loan is a good thing to take but don't assume and overlook the need to discuss it with your spouse. This is one of the things that will help you make a good decision and avoid pitfalls in your borrowing mission.

Once you have considered all these factors, you can now go ahead to pick up a mortgage loan informed by these tips. In summary, here is what to do and what not to do:-

	Do's	Don'ts
1	Pay up your debts before borrowing	Borrowing with a low credit score
2	Compare interests rates before borrowing	Approaching only one financial institution for enquiries
3	Monthly income should make room for loan repayment without hitches	Borrowing more than your monthly income can handle
4	Take Loans for Short Tenures	Going for low rates at the expense of the length of tenure
5	Engage your family prior to taking the mortgage	Taking a loan affecting family without their knowledge