With global market in turmoil the basic requirements you need to fulfill to receive a mortgage have been tightened. Today it is far more difficult to get a mortgage than it was a few years ago. To get a mortgage you need to fulfill the three C’s requirement of the mortgage companies - Capacity, Credit History and Collateral.
Credit History
People with low credit score find it extremely difficult to get mortgage. Even if they are able to get a loan, these loans are usually at higher rates of interest. The difference in interest rates of people with good and bad credit history is high as 400 basis points. So make it a point to pay your dues on time so that you end up paying low interest on your mortgage.
Capacity
The basic rule that most mortgage companies follow is that your mortgage payment should not exceed 30 percent of your gross monthly income. Your gross monthly income is arrived at by deducting your expanses and dues from your monthly pre-tax income. The higher the capacity to pay the lower will be the rate of interest.
Collateral
Collateral means the security that you provide when taking a loan. It is a known fact that your property is collateral when you take a mortgage. The amount of down payment that you make on is what makes all the difference. Also the insurance that you take, like home insurance and mortgage insurance, also makes a difference on the rate interest that you need to pay.
So visit your mortgage broker and find out the formalities that you need to fulfill to get mortgage on your property.