Applying for a mortgage loan is surely not easy especially for those who are new to this type of loan. Mortgage loans are sometimes confusing thus, before applying for a mortgage loan; borrowers should make their research first with how this type of loan works.
Borrowers usually have several questions regarding mortgage loans such as what is a commitment letter, condition approval and when can they finally get the licensed money lender or bank’s approval.
Before we get to the answers from these questions, we should first discuss the basic definitions being used when applying for a mortgage loan like the mortgage commitment and mortgage conditions.
The mortgage commitment is when the licensed moneylender https://www.licensedmoneylender.loan/ commits to the borrower that they will allow the borrower to have a mortgage loan from them. A commitment is a written document or letter where all the details of the loan are listed.
Things that are included in the mortgage commitment letter are the type of loan, how much will be the borrower lend, the repayment terms they have discussed and the interest rate per annum that they will be charging the borrower.
There are also some mortgage commitment letters that are conditional thus you can found in the letter the conditions the lenders give the borrower before he or she can have the loan approval.
Moneylenders use conditions before any loan approval, and that includes mortgage loans where a big amount of money is involved. If you wanted to have your mortgage loan approved right away, you should make sure that you will be complying with their mortgage conditions.
A mortgage condition varies depending on the lender, but usually, it is about proof of mortgage or homeowner insurance and submission of other needed documents. There may be other moneylenders that have other mortgage conditions such as the following:
● A borrower should pay any outstanding and old debts
A mortgage loan would accumulate a big amount of your monthly salary that’s why lenders would require borrowers to manage and fix their old debts first to have an easier mortgage loan repayment in the future.
● Copies of updated bank statement
Through your bank statement, the lender can verify whether you can afford the monthly repayment and if not, they can also make adjustments on the repayment terms.
● Addition requirements that could verify income, assets, and debts
Some of the additional requirements a lender may ask the borrow are their tax returns, pay stubs and credit history.
● Employment verification from the borrower’s employer
If this is included in the condition, you can ask for an employment verification letter from your employer.
● Complying to a termite inspection of the house being purchased
One of the requirements for you to have a mortgage loan is the termite inspection where the lender would also check whether the house you are going to purchase is safe and no problems will occur in the future.
These are the common mortgage conditions that moneylenders and banks in Singapore give their borrowers. You might be able to encounter a lender in the country that has different mortgage conditions; these conditions vary from lenders where there are some conditions from the list that are not included in your mortgage condition while there are also some conditions in your mortgage conditions that is not in our list.
Some may find these conditions hard to manage, but after you are done with all these conditions, the lender will now give you the green light where you are now getting closer to having a mortgage loan approval.
All the mortgage conditions are made and written by the underwriter, and after you have complied with all of their condition, the underwriting team will now then verify if the documents and proofs you have given them are legit.
The underwriting team is also in charge of checking any errors in the documents you gave them, and once they have already approved your mortgage condition, they will forward your application for approval of the loan.
These mortgage conditions and commitments are your way to have your loan approval hence you should prepare yourself ahead of time so that you won’t have any problem whenever they give you these conditions.
If you have old debts, make sure that you are going to manage it as soon as you can and don’t wait for the money lender or bank to ask you to repay these debts because just by knowing that you didn’t pay your old debts punctually, the lender will now have doubts that you are going to comply with their repayment terms.
Before you apply for a mortgage loan, always plan ahead of time and do your best to give the licensed moneylender or bank in Singapore an impression that you are deserving of having the mortgage loan approval.