As we have mentioned many other times here on the site, mortgages are a very large loan that will have a significant impact on the private economy. Since it is such a large loan, it is extra important to keep track of all the terms and conditions that apply to the loan.
The lender will always give you the opportunity to read through the terms before any papers are signed so you never have to worry about them. Furthermore, there are always the terms and conditions for the lenders’ mortgages posted on their websites where they can be read at your own discretion.
But to give you a little basic overview, here are some things that are included in the terms. The exact design can, of course, then vary between the different lenders, but usually it is relatively the same.
The basic requirements set by lenders are often divided into two different parts. These are personal requirements and then on safety.
The lenders do not lend money to be kind, but they do this to make money, which is pretty obvious. Therefore, they set certain requirements that a borrower must meet in order for them to consider lending money. First, anyone who wants to take out a mortgage must be of legal age. This is a requirement that always applies to all types of loans. Furthermore, one should normally be a Swedish citizen and have an income that is considered sufficient.
What is a sufficiently large income cannot be said in advance as it is very much about how much the housing costs. They say for themselves that a person who wants to borrow USD 3 million needs to have a higher income than someone who wants to borrow USD 500,000.
Most often, a potential lender may not have any active payment notes. However, this is something you can get around when it comes to mortgages. On the one hand, there are lenders that target people with slightly worse finances, and then it is also possible to borrow from the big banks. Then it really is important to have a good economy so that they feel secure. Then it should be said that even with those who target people with poorer finances, there is no guarantee that an application will be approved without a credit check, as always be done.
The property that is purchased must be used as collateral for the mortgage loan, which means that the lender is entitled to this. For example, the home must be worthy enough for them to agree to have it as collateral for the loan. Furthermore, demands can be made on the condition of the dwelling itself, etc.
A loan must always be repaid, even though it often happens for a very long time when it comes to mortgages. It is not uncommon for a mortgage loan to be repaid in 50 – 60 years. However, in order to get such a long repayment period, the borrower must be quite young. Sometimes the lenders can also agree that the borrower does not repay anything at all on the loan. This gives even lower monthly costs, but at the same time the loan becomes totally more expensive.
Divide the loan
Although a mortgage is a loan, it can be divided into several different parts. And then we are not talking about top and bottom loans. Without the mortgage, which is the part of the loan for which the home is collateral can also be divided. It is possible to divide the loan in principle as you would with different lengths of bonding times.
How high the interest rate on a loan becomes depends on the market situation at the moment and then how one chooses when it comes to bonding times. In general, it can be said that longer bonding time means higher interest rates than a short bonding time. However, this is generally why it can sometimes be cheaper with longer maturities. Otherwise, the great advantage of long maturity is that it is safer as the interest rate will not change regardless of what happens during the term of the bond. While mobile then more likely to be cheaper.
Before you sign any loan paper, it is important to know exactly what applies with different fees. For example, there may be setup fees for a loan (often negotiable) or other fees. Furthermore, one should keep track of what happens if a refund is delayed. Not because something like this is planned, but it is good to be prepared anyway.