Nothing beats the joy of owning one’s own home. No more landlords knocking on your door at the turn of the month, no more headaches on expanding a rental house to suite your family’s needs. The ultimate mark of success for every man I believe having your won abode.

But in today’s fast paced society often equated to ‘microwave society’ where individuals want everything, from cars, laundry, food, hair dressing and homes. Yes homes, in an instant. Think for a moment, do you take time to think before penning agreement to that contract. With so much information being thrown at us by real estate agents we are spoilt for choice, which sometimes turns to be our greatest undoing.

A home loan can be defined as the funds a buyer has to borrow usually from a bank and other financial institutions to procure a property, generally secured by a registered credit to the bank over the property being purchased. It can also be defined as a loan secured by equity value in the borrower’s home. Most clients wanting to acquire a home confuse home loans to mortgages. A mortgage is not a loan, and it is not something that the lender gives you. It is a security instrument that you give to the lender, a document that protects the lender’s interests in your property.

Key things that will guide you in differentiating a home loan from mortgages:

• There are two parties to a mortgage. You are the mortgagor, or borrower, and the lender is the mortgagee.
• A mortgage document creates a lien (a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation.).
• Ownership cannot be transferred to someone else until you pay the debt to release the lien.
• A mortgage gives the lender the right to sell the secured property to recover funds if you do not pay the debt. The sales process is called foreclosure.

Whether you’re ready to buy your first home, need a home loan to buy an investment property or new home, or simply want to learn more about paying off existing home loans sooner, you need to have key information at your finger tips.

1. Know your monetary gains: Take a moment and answer these questions:

1. Do you hold enough money to buy your dream house irrespective of any calculations?
2. Do you need financing?

If you answered ‘YES’ to number two then are into your own business or working under a boss. You never know when you may have to switch your job and relocate to another city. If you need to relocate, you will be having two options:

• Stay on rent in another city and continue your home loan
• Sell your home and buy a new one in another city

2. Revenue has to be uninterrupted: borrowers most often do not get the best deals when:

• They fail to mention extra income sources that may come because of maintenance from divorced parties or government grants.
• In case of bad debts in matrimony, there is the tendency to apply as a sole applicant. Both can apply only that the financial institutions in such cases will not allow for the spouses with bad debt income included.

3. Debts must be fully disclosed
4. Don’t disrupt your financial situation

Tags: Home loan mortgage, Home loan rates, Home Loans

This entry was posted on Friday, May 7th, 2010 at 8:07 am and is filed under Home Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.