Here are the 5 common frequently asked questions that most of the people ask before applying for the home Loan.
FAQ 1: What is a home loan?
Home loan is a loan disbursed by a financial institution or bank to an individual to buy a home or residential property. It is a secured loan where the property is mortgaged to a lender until repayment of the loan along with interest.
FAQ 2: What is the typical time duration to repay home loan in Stillwater MN?
The typical time duration to repay home loan in Stillwater MN depends on the repayment ability of a borrower based on their monthly income as well as existing EMIs. The minimum tenure to repay the home loan is 5 years and maximum is 30 years.
FAQ 3: What is the eligibility criteria to get the home loan?
To apply for home loan, an individual whether salaried or self-employed must have a regular monthly income. One must be at least 21 years old when the loan period begins and should not exceed an age of 65 years when the loan ends or at the time of superannuation. This is the generic eligibility criteria and specifics such as the minimum and maximum age limits, minimum income level, etc. may differ from one lender to another.
FAQ 4: What is the difference between interest rate and APR?
Basically, an interest rate is the amount you pay on the pending amount of your home loan. However, an Annual Percentage Rate (APR) includes interest rate plus any additional cost or prepaid finance charges such as the origination fee, private mortgage insurance, and processing fees.
FAQ 5: Which amounts are included in my monthly payments?
If you have a fully amortizing mortgage, you have to pay for loan principal and interest. For interest-only mortgage payments you’ve to pay the interest due on the outstanding principal balance. Moreover, if you have set up an escrow account for your mortgage, you have to pay for your property taxes and homeowners insurance also.
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