Qualifying for a mortgage: The road towards your new home

Written By: Pradeep Gupta

When looking to buy a house with a loan, you need to ask whether you qualify for a mortgage. Indian mortgage lenders base their decisions on a variety of criteria before they approve or reject an application.

The secret in qualifying for a mortgage is to know what lenders want from their applicants. The best strategy is to be prepared before you set up an appointment with a mortgage lender. Thus, it wouldn't hurt to do a little research about mortgages. The more you know, the more likely it is you will qualify for a mortgage.

First, what is a mortgage? It is long-term loan granted by a lender, usually a bank or a private financial company, which allows you to purchase a property without paying for the full price of the property all at once.

For Indian mortgages, the usual length of time is 20 years, and the applicant could modify the length of time that they want for their mortgage to be paid. Choosing the right kind of mortgage for you can give you a lot of benefits.

First, it gives you enough leverage in the future. Second, it is more affordable and attainable, compared to buying a home instantly. Third, a regularly paid mortgage can give you very good credit ratings. This can greatly help you get approved for other kinds of loans like financing a car.

The next step is knowing what it takes in order to qualify for a mortgage. What is the secret behind a successful application? Here are some helpful tips from people who have passed their mortgage applications with flying colors:

1. Be ready for the down payment. In a conventional Indian mortgage, the usual down payment is 20-30 percent. If you have what they are looking for, however, mortgage lenders can ask for as little as five percent for residents and 10 percent for non-residents. That is very low and affordable. So be sure that you have enough money to cover the down payment.
2. Know your monthly expenses. When applying for a mortgage, it is imperative for you to determine if your monthly earnings can cover your monthly mortgage payment. Knowing how much your monthly expenses are can help you see if you can afford your mortgage. According to the India Mortgage and Housing Corporation, the ideal scenario is when the housing costs (which includes your monthly mortgage payment plus interest, and plus your taxes and maintenance expenses) is less than 32 percent of your monthly income.
3. Have a clean credit record. Indian mortgage lenders are very particular with an applicant's credit standing. If you have existing loans or credit, they usually require that your debt load be 30 percent less than what you earn. If you do not have a credit line that you can show them, try applying for a credit card or car loan first. Pay it regularly so that they will see that you are a good borrower.
4. Make sure that your documents are ready. Mortgage lenders will usually require several documents which will help them decide if you are qualified for a mortgage or not. Make sure that on your appointment with the lenders, you have a complete set of documents with you. You will usually need proof of income, valid identification, employment certificates and other bank or financial records like other loans and credit card debts.

By following these tips, you can be sure that you will qualify for the best mortgage option, which suits your needs. By following these simple yet effective tips, you are increasing your chances of qualifying for mortgage here in India.

Finance to NPA Accounts, Restructure trade financing.

Finance to NPA Accounts.

NPA Solutions: If you have any NPA account of youself, your clients or others, than we Monei Matters has a solution for you to get more money to settle your existing NPA accounts with existing bankers with additional loan to you to re-start your business. In India, there are many loan consultants , debt syndicators who can arrange money when your bank position is well but no one can help you on getting a stamp of NPA on your business. Even your existing bankers may also refuse your requests for restructing or your demand for additional funds on getting financial stress in your company.

But now Monei Matters has a unique idea to resolve your problem for NPA accounts. 

For quicker responce, please send a email to us on info@moneimatters.com or SMS - "NPA" at 9711993227 / 9911113227.

Monei Matters yours business Partner since 2006.

Loans :Tips to Get Approved for a Home Mortgage Loan

Some people don’t know the first thing about getting a mortgage loan. They hear reports of dropping interest rates and lower home prices and hastily decide to jump into home ownership. But the process of getting a home loan differs from getting a car loan or renting an apartment, and applicants who don’t recognize these key differences are often disappointed when a lender denies their mortgage loan application.

Educating yourself is key, and there are a number of ways to avoid this heartache and disappointment when applying for a mortgage loan.

Home Loans : Monei Matters

Getting Your Mortgage Loan Approved

Buying a house is already stressful, and being ill-prepared heightens the anxiety. Why put yourself through this? Learn how to think like a lender and educate yourself on the best ways to get your mortgage loan approved:

1. Know Your Credit Score

It literally takes a few minutes to pull your credit report and order your credit score. But surprisingly, some future home buyers never review their scores and credit history before submitting a home loan application, assuming that their scores are high enough to qualify. And many never consider the possibility of identity theft. However, a low credit score and credit fraud can stop a mortgage application dead in its tracks.

Credit scores and credit activity have a major impact on mortgage approvals. According to the MONEI MATTERS, a large percentage of lenders require a minimum credit score of 680 (620 for FHA mortgage loans) – and if your score falls below 680, lenders can deny your request for a conventional mortgage loan.

In addition to higher credit score requirements, several missed payments, frequent lateness, and other derogatory credit information can stop mortgage approvals. Pay your bills on time, lower your debts, and stay on top of your credit report. Cleaning up your credit history beforehand and fixing errors on your credit report are key to keeping up a good credit score.

Loans: Monei Matters

2. Save Your Cash

Requirements for getting a mortgage loan often change, and if you are considering applying for a home loan in the near future, be ready to cough up the cash. Walking into a lender’s office with zero cash is a quick way to get your home loan application rejected. Mortgage lenders are cautious: Whereas they once approved zero-down mortgage loans, they now require a down payment.

Down payment minimums vary and depend on various factors, such as the type of loan and the lender. Each lender establishes its own criteria for down payments, but on average, you’ll need at least a 15% down payment. Aim for a higher down payment if you have the means. A 40% down payment not only knocks down your mortgage balance, it also alleviates private mortgage insurance or PMI. Lenders attach this extra insurance to properties without 40% equity, and paying PMI increases the monthly mortgage payment. Get rid of PMI payments and you can enjoy lower, more affordable mortgage payments.

However, down payments aren’t the only expense you must worry about. Getting a mortgage also involves closing costs, home inspections, home appraisals, title searches, credit report fees, application fees, and other expenses. Closing costs are roughly 3% to 5% of the mortgage balance – paid to your lender before you can seal the deal.

3. Stay at Your Job

I know someone who quit working seven days before she and her husband were to close on their mortgage loan. I have no idea why, and unfortunately, it didn’t turn out well for them. They weren’t able to close on their new home and they lost out on a great deal.

Sticking with your employer while going through the home buying process is crucial. Any changes to your employment or income status can stop or greatly delay the mortgage process.

Lenders approve your home loan based on the information provided in your application. Taking a lower-paying job or quitting your job to become self-employed throws a wrench in the plans, and lenders must reevaluate your finances to see if you still qualify for the loan.

4. Pay Down Debt and Avoid New Debt

You don’t need a zero balance on your credit cards to qualify for a mortgage loan. However, the less you owe your creditors, the better. Your debts determine if you can get a mortgage, as well as how much you can acquire from a lender. Lenders evaluate your debt-to-income ratio before approving the mortgage. If you have a high debt ratio because you’re carrying a lot of credit card debt , the lender can turn down your request or offer a lower mortgage. This is because your entire monthly debt payments — including the mortgage – shouldn’t exceed 36% of your gross monthly income. However, paying down your consumer debt before completing an application lowers your debt-to-income ratio and can help you acquire a better mortgage rate.

But even if you’re approved for a mortgage with consumer debt, it’s important to avoid new debt while going through the mortgage process. Lenders re-check your credit before closing, and if your credit report reveals additional or new debts, this can stop the mortgage closing.

As a rule, avoid any major purchases until after you’ve closed on the mortgage loan. This can include financing a new car, purchasing home appliances with your credit card, or cosigning someone’s loan.

Home Loans : Monei Matters

5. Get Pre-Approved for a Mortgage

Getting pre-approved for a mortgage loan before looking at houses is emotionally and financially responsible. On one hand, you know what you can spend before bidding on properties. And on the other hand, you avoid falling in love with a house that you can’t afford.

The pre-approval process is fairly simple: Contact a mortgage lender, submit your financial and personal information, and wait for a response. Pre-approvals include everything from how much you can afford, to the interest rate you’ll pay on the loan. The lender prints a pre-approval letter for your records, and funds are available as soon as a seller accepts your bid. Though it’s not always that simple, it can be.

6. Know What You Can Afford

We at MONEI MATTERS know from professional experience that lenders do pre-approve applicants for more than they can afford. After receiving a pre-approval letter from our lender, we may wonder whether they had read the right tax returns. We appreciated the lender’s generosity, but ultimately we must decide on a home that fit comfortably within our budget.

Don’t let lenders dictate how much you should spend on a mortgage loan. Lenders determine pre-approval amounts based on your income and credit report, and they don’t factor in how much you spend on daycare, insurance, groceries, or fuel. Rather than purchase a more expensive house because the lender says you can, be smart and keep your housing expense within your means.

Home Loans : Monei Matters

Final Word

If you don’t meet the qualifications for a mortgage loan, don’t get discouraged. Instead, let it be motivation to improve your credit and finances. Many people have risen above credit problems, bankruptcy, foreclosure, and repossession specifically in order to purchase their first house. Just be sure to implement a realistic plan and stick to it.

How long did it take you to realize your dream of home ownership? If you’re currently working toward this goal, what steps have you taken?

For More details on other products, please visit : www.moneimatters.com

Working Capital Loans / OD Limits

Working Capital Loans

Woking Capital Limits (Cash Credits) / OD Limits :-  Advances by Indian Banks, generally take the following three forms, i.e., cash credits, overdrafts and Loans. A cash credit is an arrangement by which a banker allows his customer to borrow money upto a certain limit against the values of his stocks and book debts for his day to day requirements. This is the most favourite mode of borrowing by large commercial and industrial concerns in India, on account of the advantage that a customer need not borrow at once, the whole of the amount he is likely to require, but can draw such amounts as and when required. He can put back any surplus amount which he may find with him for the time being. The banker granting cash credit and overdraft facilities has to estimate the amount of his customers requirements, and in case the actual drawings fall much below his estimate, he may lose interest on the funds remaining ideal...

Overdrafts:-  When a customer  requires temporary accommodations, he may be allowed to overdraw his current account, usually against collateral securities. From the customer's point of view, this arrangement like the cash credit is advantageous as he is required to pay, interest on the amount actually used by him. The essential difference between a cash credit and an overdraft is, that the latter is supposed to be a form of bank credit to be made use of occasionally; whereas the former is used for long terms by commercial and industrial concerns during regular business. In practice, however, this distinction is not always observed and some banks set up regular limits for overdrafts also.

For more details, please CLICK HERE  

To apply for working capital / OD limits Loans, Please visit www.moneimatters.com  OR Email us at info@moneimatters.com

NPA ( Non Performing Assets)

NPA (Non- Performing Assets)

An asset, including a leased asset, becomes non-performing when it ceases to generate income for the bank. A "non performing asset"(NPA) is a loan or an advance where:

1. The interest / or instalment of principal remain overdue for a period of more than 90 days in respect of a term loan.
2. The account remains "out of order" for a period of more then 90 days as indicated below, in respect of an overdraft / cash credit.
3. The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted.
4. The installments of principal or interest thereon remains overdue for two crop seasons for short duration crops.
5. The installments of principal or interest thereon remains overdue for one crop seasons for long duration crops.
6. The amount of liquidity facility remains outstanding for more than 90 days, in respect of a securitisation transaction undertaken in terms of guidelines on securitisation dated Feb 1, 2006.
7. In respect of derivative transactions, the overdue receivables representing positive mark-to-market value of a derivative contract, if these remains unpaid for a period of 90 days from the specified due date for payments.

In case of interest payments, banks should, classify an account as NPA only if the interest due and charged during any quarter is not serviced fully within 90 days from the end of the quarter. 


 For more informations on this subject or if you wish to get concrete solutions against NPA problems, please visit www.moneimatters.com or email us at info@info@moneimatters.com .