Buying a home can be made easier by the so-called pre-qualification, meaning that the buyer has the paper to get the credit he needs, though this solution is not yet widely available in the market – says Good Finance, relatively few use the loan redemption. However, the average interest rate on a home loan 5 years ago has fallen below 11 percent to 11.23 percent, a significant difference.
If you need a loan to buy a selected home
Today, there is a solution that if you need a loan to buy a selected home, you will be able to use the amount you are seeking from the bank almost immediately. Although so-called pre-qualification has been available at several banks for years, relatively few know it, according to Good Finance .
“Pre -qualification means that borrowers planning to buy a home will contact the bank before they find the home. During the pre-qualification process, the bank will, among other things, examine the creditworthiness of those involved, ask for the necessary paperwork, such as income, and then provide proof of the maximum amount of credit it can provide over a specified period, such as 3-6 months. This will make your home search more predictable, so the buyer will know exactly how much to manage. In addition to the seller of the selected home , there is also a guarantee that the buyer will get a loan, ”said Jessica Brown, an expert at Good Finance . He added that, in his experience, the pre-qualification certificate was not yet widely available in the market, but those who had already used it were satisfied because it had greatly simplified the procedure.
According to Good Finance , there are still many who are not watching the changes in interest rates and are not taking advantage of the lower interest rate environment than before, although saving on a loan can save a significant amount. According to Good Finance, the average market interest rate on home loans was just over five years ago in November 2012, before falling to around 5% by the end of 2017. All this makes a huge difference in the case of a $ 8 million home loan applied for 20 years. If we calculate the interest five years earlier, the monthly repayment will exceed 81 thousand HUF. In contrast, the 5% level corresponds to just over $ 50,000 a month.
It is worth choosing mortgages with a fixed installment
According to Jessica Brown , in case of loan redemption, it is worth choosing mortgages with a fixed installment for several years, because they are predictable, and if the interest rate environment changes during the term of the loan and the interest rates rise, the monthly expense will not increase either.
As with any home loan borrowing, it is true that the offers of as many banks as possible should be examined as the differences may be significant . As an example, the expert said that at the end of January, a 10-year home loan with a fixed repayment period of 10 years with a fixed installment of less than 100 thousand HUF, while the more expensive constructions cost 110-125 thousand HUF.