For those who want to buy a home but financially, a home loan is a top choice. So, how to get loans easily and without trouble. Here are some experiences to make your loan process go smoothly.
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Prepare full loan application
In order to proceed with the loan smoothly and without delay, you need to prepare all loan application documents and related documents. If you lack one of the required documents, the process will have to wait for an additional wait, which in turn will delay the extra time-consuming procedure. You should know in advance what kind of documents are required by the bank such as the house/land purchase intention, deposit, agreement or house purchase contract, proof of income … To be able to grasp these procedures, you should ask the bank staff to advise you. If the documents are not available and incomplete, the loan will be delayed longer.
Specific loan documents:
Application for the bank loan and repayment plan.
Passport, ID card/passport of the borrower and co-owner (if any).
Papers relating to collateral.
Documents related to income to repay the loan.
The loan (for house building, repairing), contract or agreement on purchase and sale of houses (for house purchase, transfer of the right to rent the house or transfer of land use right).
Other documents required by the bank.
Bank loans to buy houses
Pay attention to the issue of interest rates and penalties
When dealing with a bank, you need to carefully read the credit agreement, terms related to interest rates in the coming years, early repayment fees … to avoid losses when floating market rates.
Many commercial banks launched preferential interest rate packages, with interest rates of only 6-7% per annum for the first 6-12 months, while in the following years, interest rates are unknown.
In addition, you also need to figure out how much interest you borrow, how long, preferential interest rates and a rough estimate of your interest rate. Customers should carefully read loan agreements, terms related to interest rates in the coming years, early repayment fees … to avoid losses when floating market rates.
Deputy General Director of Thinh Vuong Commercial Joint Stock Bank, Nguyen Van Binh remarked that the loan contract is very long but customers need to pay attention to some important points such as calculating future interest rate by referring to the present Is reasonable or not, the penalty for repayment before maturity. For example, medium and long-term interest rates in banks are around 6% -7% per annum, if the 3% margin is 9% -10% per year is reasonable. In the contract, it is necessary to show clear interest rates for customers, not to be ambiguous in terms of floating interest rates or market reference interest rates. You can refer to the full calculation of mortgage interest rates.
Banking expert, Dr. Dinh Hoai Nam said that overseas, he easily borrowed money to buy a house for 25 years with low-interest rates and stability, while Vietnam, interest rates are very high due to limited capital markets. Some banks offer very low-interest rates to offer customers but then increase the customer makes “bad cry bad”. The solution is to borrow money to buy a home you have to ask the bank to say how to calculate interest rates in the future and to forecast interest rate fluctuations because customers often hold the knife on the tongue.
Read loan agreement carefully
Reading contracts is the most important thing before you sign any contract, including a bank loan. You should carefully review your bank loan application.
As for the bank, you need to pay attention to some points: Charges, penalties when you violate the terms of the contract.
Banks usually charge a penalty of 1 ~ 3% on the outstanding balance when the customer prepayment. For overdue debts, the interest rate will be approximately 1.5 times higher than the interest rate in the term. So before signing a bank loan contract, you should consider these things carefully.
Choose a loan term that suits your needs
Depending on your financial “health”, repayment capacity and income level you should choose the appropriate loan term. If your income is high, you should keep the loan short, which will help you reduce the monthly interest you pay for the bank. On the other hand, if your income is average, you should choose a longer loan term, which guarantees a monthly repayment and still has a balance to spend on living.
Example: When you borrow VND200 million, if you borrow within 2 years, you will pay monthly interest of about VND2 million. 2-year interest is VND48 million. But if you have the high income, you can shorten the loan period to 1 year, interest debt only 24 million with the original.
Since you are borrowing money to buy a house, it is important to look at the loan term or how long it will take to repay it.
Self-assessment of repayment ability
The issue of repayment is a matter of detailed calculation, careful. In order to avoid financial distress, financial experts advise borrowers to carefully examine their budget and total monthly income before borrowing. The monthly repayment costs account for about 30-40% of total income that is considered safe and acceptable. If you exceed the above figures, you may fall into the “new debt to pay an old debt”.
Dinh The Thang, a financial expert bank, advised customers to buy a house must calculate carefully before deciding to borrow money from the bank. In fact, many banks announced interest rates to buy apartments 3% per year in the first 3-6 months. This is a form of promotion to attract customers to borrow money, while interest rates in the next years will follow the market that the calculation will be very high. If you do not consider your financial ability carefully and forecast the interest rate in the next year, the borrower will face many risks.
You are reading the article “5 Things You Should Know To Make Buying Mortgage Easier” in the section “Real Estate News” on the website: https://realestatevietnam.com.vn/
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