January 18, 2020 | Uncategorized | No Comments
Buying a home can be a particularly difficult task and the process can become even more difficult if you lack the necessary documents that are typically required to obtain a home loan. Self-employed, freelance, or contractual contractors who are unable to provide tax returns or reports can often fall into the risk clients’ list.
Few financial institutions consider such customers a serious risk and refuse them similar products. On the one hand, a mortgage loan is a particular type of loan because a mortgage is usually provided for the benefit of the bank.
If the customer does not return the relevant amount, the bank takes the corresponding property. The risk here is greater than that of a home loan because they remain the property of the client, which can easily be lost. What are the pros and cons to which you should stop when taking out this type of loans?
Is it a good fit for me with a mortgage without proof of income ?
Lenders understand that just because your financial situation is different does not mean you need to be penalized or forego the opportunity to buy or refinance a mortgage. Before seeking this kind of financing, when you have no income, it is a good idea to be sure that you are able to repay the amount.
Getting a mortgage without proving income is an extremely difficult decision that involves serious risk. After all, the only thing you will get as a result if you do not pay your installments is to lose the property.
What conditions should I meet?
The first thing you need to have is real estate that is your property and can therefore mortgage it for the benefit of the bank. There is one very subtle point here – the more attractive a property is, the greater the difference in its valuation. You would get one if you offered an apartment in the center of some of the big cities, but quite another when it comes to a village dwelling for example. Of course, there are a lot of other details in the valuation of the property that are more in line with those used by real estate brokers to advertise different offers – accessibility, extras, construction, sewerage system in the settlement, gasification, heating, construction – brick, panel , EPC…
The better the property, the greater the amount the bank will lend you. If you are not sure – ask or research online at real estate sites. Check the prices of similar properties in the area with similar parameters and you will get an approximate price and accordingly you will know what amount you would get in the form of a loan.
- Opportunity to receive a large sum of money deferred over a long payback period. If you are in dire need of a large sum and you are sure that you can handle the repayment – act boldly. However, when you have a reason not to work and you know that you could not begin earning enough money to sustain yourself soon – think again if there is no other option.
- It can take and flowed loan without proof of income. Yes, as long as you have regular revenue. Many people today work freelance and if you are a proven specialist who works in a particular field and has regular clients, then you have good enough income. In this case, it is not important that you do not work under an employment contract – you have something much more important – reliable partners you can count on and a good name that will serve you when needed.
- It is unnecessary to state exactly what the purpose of the loan is. This option applies not only to mortgage-backed claims, but also to many consumer credit claims. However, if you want a huge amount for your standard, almost every lender would like to know what the purposes for which this money will be used.
- You must own your property to mortgage. If you don’t pay, the bank collects it. You have to be extremely careful, especially when you are mortgaging your current home. There is a good chance of leaving your family homeless, which is the worst case scenario. If you are in this position, see if there is an option to get a financial product of another type, such as a consumer loan. When the only option is to mortgage your home, you need to be absolutely sure that you are able to pay your monthly installments on a regular basis and not fall behind while accumulating debt. As good as it may seem to be looking for a mortgage without proving an income and getting one from an institution accordingly, not paying the installments will only leave you homeless – nothing more. The bank will take your home, which will cause even more problems. Withdrawals are always fraught with risks, but still minimize them. By signing the mortgage, you declare that you will give your property to the institution in question if you do not pay regularly.
- The repayment period for such loans is usually about 10 years. It depends on the institution itself, but still check what the options are. If you can defer repayment with smaller installments, but for a longer period, do so. This will give you lower monthly payments and will be easier to handle in the future despite the extended term.
- You can take a similar loan even if you have a bad credit record. But … Yes, that is very specific. You are looking for a mortgage loan without proof of income because you have a bad credit record, ie. would not approve you for a standard consumer loan. However, if you deal poorly with finances in general, a mortgage will only aggravate your situation.
- There is usually a ceiling for loans in this way. Depending on the institution, you may receive a lower loan amount. To be sure what the options are, it is imperative to check the bids of several individual institutions. Mortgage loan without proof of income is a possible option if you need serious funds right away. However, see if at a market valuation X BGN, it will not appear that the bank is willing to lend you less money and accordingly there is a drastic difference between the real value of the property and the ceiling of the amount you can take.
- Higher interest rate. It is not a precedent to get an offer that is higher than the standard interest rate. Like fast loans, the institution’s purpose here is to provide additional protection, since the loan is secured only by real estate, but its price may fall and this is a serious risk of loss indexation. Of course, there is a possibility that the price of the mortgaged property will go up and the bank will eventually make a profit, but it is nevertheless a long-term bond between the two parties.