Introduction
Getting a property loan is not as easy as it was a decade ago. Financial norms are no longer what they used to be, times have changed, sadly for the worst. What was once a routine and simple process of applying for property loans is now strenuous and complicated. Banks and financial lenders at large are still feeling the heat caused by the economic clampdown. This has forced them to apply stringent measures on loan approvals as a damage control measure. Gone are the days when lenders were more than willing to advance you loans for property development. The economic downturn has not spared any sector even the real estate market has been affected and it is no longer a solid investment plan, in short, there are no guarantees. It is still possible to get a property loan, but expect more hoops and stumbling blocks along the way.
History
It will help your case if you have a stable and reliable income; however, all this will not mean much if you have a less than perfect credit score. Today over 30 percent of all Americans have a credit score of less than 600 and banks are not taking this fact lightly. Over the last 5 years banks have witnessed more people defaulting on their loans and many lending institutions have been brought on their knees due to this. If you are looking for a property loan now or in the future, you must have at least an above average credit score. You may get a willing lender if you have 650 points and above.
Features
Terms and polices applied by lenders have also changed, even if you have an impeccable score you must select your property loan lender cautiously. Carefully look at the terms offered before signing any legally binding documents. Many lenders are now offering lucrative introductory rates to lure people into taking loans. These offers however are only valid for the first six months. After this period high interest rates kick in. when searching for a property loan you need to decide whether you want a fixed or an adjustable rate. Carefully asses both provisions and find out which one works best for you. Plus in the midst of the current economic crisis, it is very rare for rates to be adjusted downwards, so a fixed rate may be the better option or at least the lesser evil.
Tips and comments
Just because a lender approves you for a loan does not mean that it is the best deal you can get. Keep your options open and take the time to search for better terms. In order to get better loan terms you need to have a solid investment plan, this includes financial and background information. Banks will be willing to listen to you if you have a detailed plan and a strategy. Finding a good deal on a property loan is now harder but it’s still doable. Property still continues to be one of the safer investment options and you have a chance of making it big despite the economic slump.
