For most young people purchasing a residential property of their choice can be a taxing experience especially when they have hardly any knowledge of the present market conditions. Besides, selecting the right location, arranging the monetary resources to pay for a place they intend to can call home can also be a challenging task for such individuals. Moreover, the prices in this sector of the economy are also increasing every year. This is why many of these potential property buyers are opting to applying for real estate loans.
Steve Liefschultz, is the Chairman and Chief Executive Officer of Equity Bank, a financial institution that specializes in real estate loans and investment lines of credit to his customers in Minnesota region. This banker, former lawyer and property expert says it is important for young people for opting for apply for real estate loans to take into account the following points:
- Is purchasing a residential property their main concern in life?
Young people at the beginning of their careers need to ask themselves why they want to buy a residential property of their own. In many cases, they hold the view that paying equated monthly installments (EMI) to the financial institution offering them a real estate loan regularly is a better option. This is because after repaying the entire installments and meeting other statutory conditions, they can call the property they are intending to buy their home;
- Is it the right time to buy such a property?
Experts who specialize in real estate investments are of the opinion that the best time for people to buy their dream homes is when they are young. This is because this provides them with plenty of time to repay the necessary installments on their property loans before they retire from their occupations. However, they need to take into consideration other factors like present market conditions, property prices and interest-rate fluctuations of such loans;
- Can these individual afford the down payment?
For people who want to buy their dream homes at a very early age arranging the necessary monetary resources to pay for the down payment of such properties can be a challenge. This is because most financial institutions offering real estate loans to such individuals will sanction an amount equivalent to 90% of property value. The remaining amount they need to burn a large hole in their pockets. This is why real estate experts recommend that these youngsters should first consider how they are going to pay for the down payment of property before applying for such loans;
- Credit score ratings
Young people need to keep in mind that their credit score ratings will ultimately determine whether the financial institutions they apply to sanctions their real estate loans. This is because such organizations will consider their clients’ previous borrowing and repayment history when they ask for such money. In many cases, the officials of such establishments have a right to reject such loans only if they find their clients have a poor credit score.
Steve Liefschultz says it is important for young people to consider the above factors before applying for real estate loans to buy their dream homes.