The real estate loans are really helpful. Purchasing a new property is a daunting task, and you need to be careful before you take the final step towards buying the property. There are some common errors everyone makes whenever they buy new real estate property. Mainly, these mistakes occur when you take a loan from commercial banks. But when you’re aware of them, you can easily evade them.
Here are some tips on getting real estate loans easily and error-free:
- Income and Tax Returns:
When you take a loan from an ordinary bank, you need to show tax return bills. Many of the banks ask you to submit tax record of at least last ten years, and you will get a loan only after meeting this requirement. Most of the times, people failed to even qualify for the loan because of low-income rate.
Then the only option left is to seek the assistance from Stated Income Lenders. As they don’t verify your income and assets, and you can get your loan at ease. Though, nowadays, the lenders have started providing loans to those possessing big cash reserves, best credit score, and can make easy down payments.
- Purpose Restriction:
Among the several challenges threatening the real estate industry, restrictions to Special Purpose Property are gaining momentum day after day. The construction of theatres, hospitals, schools, and religious buildings which are established to serve a specific purpose are called as Special Purpose Property.
There are a hundred varied property kinds that are put under this category. The common prey to this problem is commercial properties, where business owners face a tough time to avail their loans. When you desire a property which is other than an apartment, or an office construction, then you might get in hot waters. You cannot take loans for restaurants, auto-service stations, bars and many more.
- Pledged Fee:
It is also termed as commitment fee that a borrower is bound to pay the lender as the latter is agreed to grant him the loan. It is a one-time fee and usually paid at the final step of the transaction. It is a compulsory payment in case of personal estate loans.
- Business Plan:
If you’re seeking a commercial loan, then some of the banks will ask for your business plan. And it is the most speculative thing you could face. You must not share or reveal your confidential business plan to anyone at any point in time. It is the most crucial thing and must be protected against probable thefts.
- Non-Refundable Charges:
Mostly, lenders impose some processing fee on home loans, which is non-refundable. The fee can range from 0.25% to 0.50% of the total loan amount. It means if you fail to meet the eligibility process of your loan, the lender will not repay this amount. Hence, you have to make such payment after wholly understanding the processing fees policy.
Therefore, as home loan includes a huge amount; you should take it after doing a complete homework. Ensure that you know about the rights and laws related to home loan properly.