Tricks to getting the best Mortgage Loan interest rates

Tricks to getting the best Mortgage Loan interest rates

Mortgage Loan means credit or advance taken against a property. The money can either be borrowed for the purchase of the property, which is then put up as collateral, or one can put up an existing property as collateral for a loan.

Lien is a type of security interest endowed over the property. Generally in written form it secures the payment of a debt. Two types of parties are involved in Lien. One who is the immediate owner of the property termed as lienee and the other who can avail the benefit of the lien, in lieu of non-payment of the debt, termed as lienor.

Mortgage loan is a secured loan since loan is advanced against some property; hence the banks and finance organizations are interested in assisting the borrowers in need. Also, there are many banks and finance companies which tie up with real estate companies and help borrowers in availing loan from beginning to the end during the purchase of real estate.

But the real challenge is the Interest Rate. The borrower is required to repay the amount borrowed along with a certain percentage of interest, within a stipulated period as agreed upon. While there are several banks and finance companies available in the market to offer mortgage loan, the buyer hunts for the best available mortgage loan interest rates.

Here are some tricks, which may help the buyer to choose the best interest rate:

1. Credit Score: One of the main criteria to avail the best mortgage loan rates is the credit score. It is important to maintain a high credit score because credit score and interest rate are inversely related. The higher the credit score will be, lesser the interest rate offered.

2. Employment and Income stability: Every bank or Finance companies ask for the income status, Income proof and ITR filed for the past 2 years. Constantly changing jobs may pose to be a problem. So it is necessary, one sticks to a particular company for at least 2 years if planning to apply for a mortgage loan.

3. Debt-to-Income Ratio: Popularly known as DTI, it means the total credit liability of an individual and the total income earned by him. If one has already other existing loans running in his name, his chances of availing a better mortgage loan interest rate goes down.

4. Down Payment: As a basic rule, certain percentage of down payments, preferably 20% is required to be made while availing a home loan. Lesser the down payment, higher the rate of interest will be. Its simple mathematics, hence it is always advisable to make a higher down payment and avail a lower loan against property interest rate.

5. Online Tools: There are many online tools available these days which help potential borrowers to make effective comparisons. But it is very important for the borrower to first establish his position on the terms mentioned above and then compare the best mortgage Loan Interest Rate.

The author is a seasoned writer on finance topics and she articulates aspects that are important to people availing the SME loan in India facility. She writes about a variety of topics covering the home loan documents, rates & mortgage loans that help to make the best decision.