Mistakes that can easily be made when buying a home loan

Choosing inappropriate rates, not carefully reading the terms of the contract, or choosing a loan that is higher than affordability … are the most likely mistakes people make when borrowing money to buy a home.

It is easy to see now that many people, once they have chosen a good home and found a mortgage-backed bank, have rushed to sign a loan agreement, they have not even signed. Take the time to thoroughly understand the terms of the contract, resulting in the risk of the latter.

If you, the first-time homebuyer, are planning to borrow a home loan, you should know the common mistakes to draw experience for yourself. Below, realestatevietnam. offers the four most likely mistakes when borrowing bank loans for your home for more reference:

The first mistake when borrowing bank loans to buy houses: Determine the loan is not reasonable

On the market today, banks typically offer up to 50% or even 70% of home loan support. But before deciding whether to borrow money from the bank, you need to be very careful, see your income is stable and enough to pay for monthly expenses as well as payment for the amount. borrow from the bank. In order to minimize the pressure from paying home loans, you should choose a loan package that accounts for 30-40% of your total monthly income.

When borrowing a home loan, you should specify the loan to suit your income

Survey shows that the supply of apartments on the market today is divided into three basic segments:

Apartment price ranges from VND 35 – 50 million / sqm, suitable for people with income of VND30 million / month or more.

Medium-high class apartments, prices range from 20 to 34 million/sqm, suitable for people who have income of VND20 million per month or more.

Medium – low price: the price range from VND14 -20 million / sqm, suitable for people with income of at least VND15 million / month.

From the above data you can choose for yourself a segment of housing and appropriate loans, avoid buying too high compared with the monthly income source.

The second mistake when borrowing money from home buying bank: choosing the loan term is not appropriate

According to the general psychology of many people, nobody wants to borrow and pay interest for a long time. Therefore, many people choose short-term loan package to reduce the time of bank debt. However, this will create a monthly financial pressure for you, especially if you have unstable income or the risk occurs affecting the general income. It is advised that you carefully calculate your actual income and bank loan amount to determine the most suitable loan term. Longer the loan term, the monthly payment will be lower and vice versa.

If your income is low then you should extend the loan term, which will reduce the monthly amount you pay to the bank. For example, when you borrow 100 million dong, if you borrow within one year, then you will pay the outstanding principal of about 8.4 million dong with interest each month. But if your income is low, you can extend the loan term to two years. At the same time, you only have to pay the outstanding principal of VND 4.2 million per month with interest.

Mistakes that are easy to get when buying a home loan bank

If your income is low, you should choose a long loan term of 10-20 years

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The third mistake when borrowing money from home buying banks: Do not pay attention to the regulations on interest rates

Monthly, you will pay a small interest rate for the bank, but when borrowing, most customers are only interested in interest rates in the first stage.

The bank’s lower interest rates will be selected by many. But most of the low interest rates are maintained for the first time in the loan (up to 3 years) then the interest rate is floating, varying according to the band, depending on the rules of each bank.

Currently, banks apply the interest rate calculation method with the longest deposit rate + margin. You need to ask the consultant about the specific margin, the specific deposit period is 24 months or 36 months …, apply on how much deposit … to avoid being surprised when the bank raised interest .The actual rate you pay is higher than the interest rate you expect. You also need to know how to calculate or update interest rates after each adjustment of the bank to be more active in the plan to borrow and repay.

Fourth mistake when borrowing money from home buying bank: Do not read carefully the contract terms.

Usually, when the bank agrees to lend, the feeling of receiving money is easy to borrow the subject and compromise with the terms of the Credit Agreement and other contracts. Many customers do not read or understand the contents of the contract. Before signing a contract, you should ask a solicitor or an economist to see and explain clearly, negotiating irregularities with the bank. Once signed, you will need to keep one copy of the contract (with full signature, seal, seal of the bank where you borrowed).

One more note, when signing the contract, bank staff will come up with attractive terms such as additional interest rates, additional incentives when calculating the amplitude fluctuations …. These pledges are usually committed without written agreement, based on mutual trust, but if there is a problem you will not have proof to prove it. Therefore, when performing the contract, you should ensure, all are shown in writing, signed and legally validated by both parties.

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