At Asset Banking , we understand this better than most – the toil and sweat that goes into building/ buying a house and the subsequent pride and joy of owning one. This is why our Housing loan schemes are designed to make it simple for you to make a choice at least as far as financing goes!
Home loans are loans that are taken for the purpose of buying a house. Home loans are secured loans. The house acts as a collateral or security to the loan.
Home loans, also known as mortgages, use the borrower’s home for collateral. This home can be a single-family house up to a four-unit property, as well as a condominium or cooperative unit. Lenders fund home loans, but both the lenders themselves and brokers who act on behalf of the lenders originate, or process, them.
The most common purpose of a home loan is to provide the funds a buyer needs to purchase a home. Home equity loans allow a homeowner to borrow against the difference between the home’s value and the current loan balance, or equity. Investor loans permit buyers to purchase homes as rental properties or to fix up and sell at a profit.
The two most widely used types of home loans are fixed-rate loans and adjustable-rate loans. A fixed-rate loan keeps the same interest rate for the life of the loan, which means that the principal and interest portions of the monthly payment stay the same. Adjustable-rate mortgages begin with a lower interest rate for the first few years and then adjust to market rates after the initial period is over. Caps are placed on how much the rate can adjust at any one time, as well as on how much the rate can increase over the life of the loan. This means the principal and interest portions of the monthly payment change repeatedly through the life of the loan.
Housing Loans are taken by borrowers to finance the purchase of properties either for lodging or investment purposes. Housing loans tend to be large and finance company often provide a margin of financing of up to 80% of the value of the house. And since the loan is large, the finance company would require you to pledge your house as a collateral for the loan.
The maturity of housing loans range from 1 to 35 years. The maximum loan period depends on the remaining working lifespan of the borrower and also collateral’s age. Most lenders require the borrower to amortise the loan completely before his retirement. Hence, the maximum loan period equals the borrower’s retirement age less his current age. Most finance companies use either 60 or 65 years, although some finance companies may use 75 years as the retirement age.
For housing loans, finance companies require you to repay the principal and interest in instalments. The loans can be quoted on a monthly-rest, annually-rest or flat basis. Most would be quoted on a monthly-rest basis, which means that interest in compounded on a monthly reducing principal.
When selecting a housing loans, most people would pay attention to the interest rates and the loan amount payment. It should be noted that if borrowers are thinking of paying down faster or end the loan before the agreed maturity, do check out what are the penalty fees and terms & conditions.
”Assets Banking” offer some unbeatable benefits to our customers – Doorstep Service, Simplified Documentation and Guidance throughout the Process. It’s really easy!