Loan Adviser

Food, clothing and shelter are the basic necessities for any human being to survive in this world. Shelter, in the form of a house, is one of the basic necessities, and, as such, it is a dream and aspiration of every person to own a house for himself to live in. To own a house means investing a substantial amount of money, and probably, the single largest investment made by any person aspiring to purchase a house. It is obvious that many people may not be having the means to invest for purchasing a house, and may have to look out for possible funding resources. Availing loan from the banks or other financial institutions in the form of home loan or mortgage is one of the means through which a person, having a regular source of income, can fulfill his dream of purchasing a house.

What is a home loan or a mortgage? Well. A home loan or mortgage is nothing but a conditional pledge of property in the form of security to a creditor until the debt is paid off to the creditor. Banks and housing finance institutions, acting as creditors, extend loans to persons, having regular source of income and capable of repaying the amount borrowed, who intend to purchase house, on specific terms on conditions for a specific period. On average, the tenure of funding for home purchase may range between 5 years to 30 years or even up to 40 years. With the financial assistance from the banks or the housing finance institutions, the person can purchase the house. The creditor, in this case the bank or the housing finance institution, will allow the person to assume ownership to the new house as long as he continues to pay the debt obligation, or the cost of the property purchased with borrowed funds, along with applicable interest, as agreed to with the creditor. To put in other words, the newly purchased house is offered as a collateral security to the creditor by the person.

A person should be having a regular source of income to avail a substantial part of the housing investment as loan from the creditor. His credit rating, his average monthly earnings, his fixed and variable expenses per month, savings potential and other related issues will be taken into consideration by the creditor extending loans to the person. After having assessed about the earnings potential and the eligibility norms for availing the loan from the creditor, the person has to look for prospective sellers in the market who are willing to sell the house to him at affordable price. On completion of the requisite formalities and the banks or creditor, having been satisfied with the transaction, extends the loan to the purchaser.