Financial Blog

Applying for a housing loan can be an emotional roller coaster. Excitement, anxiety, anticipation, and fear of rejection—all these things can be overwhelming and may lead to forgetting the most important questions you need to ask, which is a big no-no.

Read more: Getting a Home Loan? Here are 8 Simple Tips to Get Approved

Know all about the twists and turns of your loan before signing a deal by throwing out these questions:

1. “Am I qualified for a loan?” Be sure to have your loan officer assess your qualifications beforehand. Your cash flow, income from employment, assets and liabilities, and credit history will determine your eligibility for the loan.
2. “What type of loan should I get?” Applying for the right bank loan or government-sponsored housing program based on your qualifications will up your chances of getting an approval.
3. “How does this loan meet my needs?” Be sure that you can afford the loan to get the most out of it, and be sure that the loan you are getting is enough for your purpose. Don’t get a loan that’s not suitable to your budget and needs.

1. “How much down payment do I need to make?” Most housing loans require a minimum down payment. Often, bigger down payments mean lower interest rates and better payment terms.
2. “What’s the interest rate of the loan?” Lenders get paid through the interest you pay on the loan on top of the principal loan. Factor this in when you choose which one has the lowest or most reasonable interest rate offering.
3. “Is the interest rate fixed or adjustable?” Clarify if the interest rate is fixed for the entire term of the loan or subject to adjustments periodically based on market trends. To protect yourself from rising interest rates, lock the rate at a designated period. However, this may entail lock fees.
4. “What is the payment term for the loan?” Payment terms refer to the duration and cost of your monthly payments until the loan is fully paid. Longer terms may mean lower monthly payments but higher interest rates.

1. “Can I see a good faith estimate (GFE) for my loan?” A GFE is a document that lists down all terms, including costs and fees that will be charged to you upon closing of the loan. Use it to review the real cost of the loan and compare offers from various lending institutions.
2. “Does my loan come with prepayment penalties?” Prepayment penalties may be applied when you pay off your mortgage loan earlier than the agreed term. It happens when you choose to refinance your loan or when you reduce the principal balance beyond a specific percentage.
3. “Would I need to get a mortgage insurance for my loan?” Bank lenders may require you to take out a hazard insurance on the property as protection in the event of fires or natural calamities. The insurance may or may not be through the lending institution from which you filed the loan.

1. “What are my options regarding modes of payment?” Ask if you can make payments over the counter, through auto debit arrangements, or through post-dated checks so you can pick the most convenient for you.
2. “Can I change my mode of payment?” Find out if you’re allowed to shift from one payment mode to another during the duration of your loan. If yes, ask if modifications would require you to pay advance amortization.

Don’t hesitate to ask these crucial questions before signing a loan. Or better, find a bank that will help you from day one until your loan gets approved.

Security Bank offers low interest Housing Loan option with approval in as fast as 5 days. Click here to inquire about our housing loan offer.