When you are buying a home, unless you can pay the whole amount up front, you need to get a mortgage loan. Your choice of a lender will depend on your unique needs, lending rates and the property you wish to purchase. Here are different sources for your mortgage loan.
Many banks offer mortgage loans. As result mortgage rates are very competitive. They will provide you with a wide range of services for you to choose from. There is also likely to be a real estate loan department in your bank from where you can access funding.
Savings and loans associations
Savings and loans associations are the most critical source of mortgage financing. There are interests associated with either savings or loans from the customers. In America for example, savings and loans are regulated by the U.S Treasury Department specifically the Thrift Supervision office. You can get loans for construction or renovations out of these associations. The process is also bearable compared to others.
Mortgage brokers act as a bridge between lenders and borrowers. They offer a variety of products which vary from broker to broker. They also work with different lenders at a time. You can contact a mortgage broker independently and choose from their services and service fees are either paid by the lender or buyer or even both of them.
These institutions are formed by a group of people that share similar interests. It can be educational groups or even religious groups. Amongst other privileges they enjoy, they do not pay taxes. Customers have to acquire membership first for them to qualify for a loan. Interest rates on the loans are also better than those from other lenders.
You can get a loan from anyone with some money to lend as well. You will only have to agree on the interest rates as well as sign disclosures. Ensure that you fully understand the agreement. You should also get a trustworthy lender.
Insurance companies also give loans through mortgage bankers or brokers. They provide loans as equity owners. It has proved to be very lucrative for such companies since they benefit from the premiums paid by the policyholders.
You can get a mortgage loan from your pension funds. The 401(K) platform allows you to borrow loans for the maximum of the number of your funds. Not all the plans will give you the loan so you will have to check with plan. The interest rates are low and easily accessible. Such a loan should be made quarterly and within a short period of 5 years.
You can as well make a withdrawal from your 401(k) fund. There are no limitations to the withdrawal amount, and you do not have to repay it. There is also an age limit of 59 years and above. If you are below that age, you face penalty adding up to 10 per cent of the withdrawal amount. It is also inclusive of the income taxes on the withdrawal amount. The withdrawal process can also be longer with the need to prove financial hardships.