REASONS WHY UNITED STATE MORTGAGE DOMINATES IN THE MARKET COMPARED TO THE INDIAN MORTGAGE

INTRODUCTION

Do you plan to buy a house anytime soon?  If the answer to the question is yes, the next move should be to consider the best lender who will arrange for you the best mortgage loan plan for your income. In the market, there are different countries which have mortgages for their clients, but the essential thing for any clients is to consider the best mortgage plan which the customer would consider. In the market, the two standard mortgages are the Indian and United State; however, the US mortgage continues to dominate over the Indian based mortgage.

   There are various criteria which are common in all the mortgages plans irrespective of the country which the plan is made. They include the lending interest's rate and the duration period under which the borrowers are expected to repay their debt. Mortgages are the most pleasant and convenient way for anyone to own a home. Having these facts in our mind, I believe this article will be helpful to you to make consideration of the best mortgage to consider in the market. 

 THINGS TO CONSIDER BEFORE APPLYING FOR ANY MORTGAGE

Level of Income

Credit Rating

Value of the house

ü LEVEL OF INCOME

 Your income is what the lender will consider, and also it will be used to services the long term loan.  Before someone would consider making any move to obtain a mortgage in the United States and India, he or she should consider his or her level of income.

The loan eligibility in many lending banks is based on a particular formula. However, the generally accepted norms are that the monthly payment should not exceed  28% of the client's gross income. The monthly payments should be $ 1,166.66 while the annual should be $ 14,000. When it comes it lending the lender can multiply up for times of your salary annually.

ü  VALUE OF THE HOUSE

 Every house has value, and the buyer should always assess the value of the home before considering the mortgage plan. Through valuation, one would ascertain if indeed he or she can manage to repay the house comfortably.  The values describe the amount quantified for the house, which will get covered by your mortgage. For instance, if you have saved $ 50,000 and you want to obtain a home worth $ 200,000, one will require to borrow $150,000.

ü CREDIT RATING

 Every lender in the market has some crediting rate history; one should consider the crediting rate before applying for the loans from such lenders. After reviewing the rating, the client would be in an excellent position to make the decisions on whether to proceed with the mortgage plan.

 The most common credit policy which is used is FICO scores, which would mean your score will keep on differing depending credit rating reports.  If the clients have high credit scores, it will qualify the customer for a loan. In the market, the lower the credit score, the higher the chance you will pay your mortgages and vice versa. 

REASON WHY UNITED STATES DOMINATES OVER INDIAN MORTGAGES

·       US lending rates Cheaper

·        Repayment period.

·       United State mortgages are well  structured

UNITED STATE LENDING RATES ARE CHEAPER

In the United States market, the lending rates are usually cheaper compared to the Indian based mortgage, thus making them favorable to many customers across the globe.  Due to the favorable lending rates in the country, it has led to a strong driving force in the market.  In the country, the average lending rates for the mortgages is set between 3 to 4.5%. On the other hand, the Indian bank usually charges its customer averages rates of between 10 to 12 % per year. Every customer would consider United State mortgage compared to the Indian if lending rates are the considerations. 

 For the Indian bank's lenders to be competitive like their counterpart in the US, they need to review the lending rates and lower the rates. With the reduction in the lending rates, it would make the Indian mortgages to be attractive and thus increase the number of customers who seek for a mortgage plan. However, the progress of the economy would determine the lending rates which are set by the regulating body in the country.

  LOAN REPAYMENT PERIOD

 Every mortgage has a duration period similar to any other long term loan. In the United States market, the repayment period for the mortgages is usually 360 months, which is equivalent to 30 years. The loan term is convenient for any customer who is seeking for the mortgages plan. On the other hand, Indian mortgages have a loan term of 20 years, which is ten years or less compared to the US.

Most of the clients in the market would consider the US mortgages because its repayment period is longer; hence, the installment would get distributed over a long period, thus reducing the amount paid.  The mortgage plans will be favorable to both high-income earners and also the middle-income earners, unlike the Indian mortgage.

·       UNITED STATE MORTGAGES IS WELL  STRUCTURED

United States mortgage market is well structured and regulated in a manner, thus reducing any form of malpractices in the market. For instance, the market has all sort of regulation and rules which ensure all the banks and other stakeholders in the industry adhere to the set rules in the market. Rules and regulations ensure that the mortgage plans stages get adhered with a lot of concern. 

In one way or the other, the rules cover, among other areas such as application time and also the agreements which are significant impediments to the growth of the market.  On the other, the biggest competitor of US mortgages is Indian mortgages, which are less structured and have fewer regulations.

 CONCLUSION

Buying a house should be done through a mortgage plan due to the benefits it accrues to the client who considers this plan. For instance, one would pay for the house at a more extended period, thus allowing one to consider some essential things in life, which also needs money. In addition to that, one would get access to the right home, which would have been only a dream.  United State mortgage is more favorable compared to the Indian mortgage; hence, any customer in the market should consider taking these mortgages when or she wishes to have a home under his or her name.

 Mortgages market could get determined by the progress in the economy of the country in several ways. For instance, in the United States, the economy is doing well compared to the Indian economy hence making then the United States, lenders to lend loans with cheaper interest rates.