Most people have their own ideas of their dream houses. Furthermore, all of us long to have our very own place to call home. Although with the circumstances, not everyone can afford to buy one immediately. This is why our government came up with different ways on how Filipinos can get homes. One of which is by processing a home loan.
Before we dive into that topic, I want you to first understand what mortgage is. Mortgage is an instrument used by either purchasers of real estate investments to raise funds. On the other hand, existing property owners can also use it to raise funds for any purpose; this is done by putting a lien over the property being mortgaged. To give it to you simpler, it is when a property or real estate is used as a collateral. The borrower gets into an agreement with a lender (in most cases, it’s a bank). The borrower then receives cash upfront and pays the amount agreed upon in a certain span of time.
What is the importance of mortgages?
Mortgages are a good leverage for people and institutions who are looking to acquire certain property/ies or real estate and does not have enough funds to do it. For example, you want to buy a house and you do not have enough money to pay for the upfront cost, that’s the time you’d want to mortgage.
Both the borrowers and lenders take risks in entering this agreement; lenderstake the risk of granting these loans because they do not have the guarantee that the borrower would be able to pay. On the other hand, borrowers also take the risk of accepting these loans because failure to comply would mean total loss of their asset.
What is the process of mortgage house/home loans?
Like any other, the mortgage process is also quite confusing. In this article, we will be showing you the process of home mortgage loans.
Step 1: Pre-qualification
This stage is the meet-and-greet that some might call. This stage can make or break the situation. Pre-qualification is fairly simple; this is the part where the borrower meets the lender (over the phone, internet, or physical). This is the time when information about assets, liabilities, properties gets thrown out. This stage does not only show your capacity to pay but your willingness with the process as well.
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