Important points to remember about home loans

What is a home loan,mortgage,bond?
A home loan is an agreement between you a potential homeowner and a bank. The terms of this agreement are that you shall make a loan to the value of the home you want to purchase and that you as the homeowner shall repay this home loan over the course of 20 or 30 years. Once the home loan is repaid, the bank will hand over the deed of the property to you.

Why you need a home loan?
Unless you have the cash to buy a new home, you will most likely need to apply for a home loan when purchasing a home. This process involves you having to be credit worthy and have the ability to meet your repayment needs. There a few additional points to remember when applying for a home loan which we will discuss now.

Important points to remember when applying for a home loan

1. N.B. You are the customer, the customer is king!
This is the most important aspect of applying for a home loan. Some people believe that they are at the mercy of the banks when applying for a home loan when in fact this is far from the truth. The bank needs your money more than you think and they will do anything to get your business.

2. N.B. Home loans are the banks best friend, not yours!
When applying for a home loan remember that whoever you apply with and whatever they say, they are not your friends. Banks or mortgage originators will go out of their way to make you feel at ease and make you believe that their option is the best and only option for you. Banks know that the less they give back to you, the more money they will make out of you. The more savings you can squeeze out of the banks, the less you will pay over the term of your home loan.

3. N.B. Don't settle for just 1 application, get more that 1!
When applying for a home loan, originators (the people who apply to all the banks on your behalf) will always tell you that "this is the best offer they have". Don't fall for this trick and don't forget, they are here to make money out of you. Think of your home loan as a fish that you want to sell and the banks are your customers, with more customers wanting to buy your fish, you can choose which one offers the best solution and you can show that solution to your other customers. When they see other solutions offered by other customers, they will try to beat other offers and as a result you will always be offered a better solution.

4. N.B. Don't just settle for your bank, it's not against the law!
Naturally people will think that because they bank with a particular bank, their only option is to go to their own bank for a home loan but this is the last place you want to apply for a home loan. Your bank is expecting you to come knocking on the door for a home loan sooner or later but what they wouldn't expect is if you went to their competition. This is the best way in which to grab their attention and use them to get what you want. You are allowed to do this and it's as simple as applying for a loan at a bank other than your own. You would just need to submit more documents but the payoff is going to be much better.

5. N.B. Use your home loan as a bargaining tool against other offers!
Find the best solution that suits your needs, and use it as a bargaining tool against other offers. When banks see that you want a better offer and that you already have a better offer on the table, they will give in and try to beat the offer to get your business. Each bank has home loan criteria which they try to adhere to and because criteria differ from bank to bank, you can use this to get the best solution. Some may offer you a home loan, but if you move your bank account to them, they might offer you free banking services as a reward. The point I'm trying to make here is that, it is really up to you to determine how much you want to pay for new home.

6. N.B. Now is the best time to apply, even if you don't intend on buying!
The best time to apply for a home loan is now, even if you don't intend on buying a home. Knowing what you qualify for is the best advice I can offer you. Let's just say you have a home in mind but you are not sure yet what it would cost you, you apply for a home loan but only to find out that what you qualify for is lower than what the house is going for. You then scramble to get more money and make more loans but only to find out that your dream home has been sold to someone else who had a big enough home loan. What's very important to note here is that you must be prepared when buying a home, don't be caught unexpected, don't be desperate to get the home only to find out that it will costs twice as much because you didn't do your home work.

7. N.B. Apply online, it's quick, easy and convenient!
The easiest and quickest way to for you to apply for a new home loan is online, no paperwork, just a few details and they will call you back. Already you are saving. When you apply online for a home loan, you have more options and you can do multiple applications. You can also work with online calculators to show you exactly how much you will be applying for your new home loan. Applying online through mortgage originators or bond originators is the best solution. They apply on your behalf to all major banks and including some other financial institutions which you may not even know about. The benefits of applying to multiple banks are that they compete against each other for your business.