For many people, it is quite a task to arrange the down payment while buying a new home. And if an individual does not meet a lender’s eligibility criteria, then getting a loan for a house is also a challenge.
However, it has now become easier with the availability of mortgage guarantee backed home loans. With these loans in place, the amount of down payment that one has to pay is comparatively lower because of the higher LTV (Loan to Value) on the home loan. While the concept of ‘mortgage’ in home-buying is well known in western countries, the advent of mortgage guarantee has made getting a high amount home loan a distinct possibility.
Mentioned below are the three major benefits of mortgage guarantee backed home loans:
1. Buying your home sooner
A mortgage guarantee backed home loan helps the borrowers to buy their dream homes earlier than they would have anticipated. A higher loan-to-value ratio means you have to spend less time in arranging the down payment, and that in turn encourages early home ownership.
2. Increased buying power
Mortgage guarantee for the lender (who gives the home loan) translates to higher buying power for the borrower. To state it more specifically, if you opt for a mortgage guarantee backed home loan, you get better repayment terms in terms of higher loan amount and longer repayment tenure.
3. Quicker approval of loans
Loans backed by the best mortgage guarantee companies act as a form of insurance for the lender; as a result, mortgage guarantee backed home loans are characterized by quicker approvals which are comparable to conventional home loans.
These three benefits, in totality, can make a world of difference for homebuyers who aspire to own bigger, better homes at an early age. Moreover, the longer repayment tenure helps a borrower plan his finances, and spread out his liability of loan repayment as per his pocket.
