If you`re in the market for a new home, you may have heard the term „home loan on agreement value“ mentioned. What does it mean, and how does it affect your home buying experience?
Simply put, home loan on agreement value refers to the amount of money a lender is willing to loan you based on the value of your home purchase agreement. This means the loan amount is not solely determined by the property`s market value, but also takes into account the agreement made between you and the seller.
Why is this important? Well, if the market value of the property is lower than the agreement value, you may end up needing to come up with additional funds to cover the difference between the loan amount and the purchase price. On the other hand, if the market value is higher than the agreement value, the lender may be willing to loan you more than you originally anticipated.
It`s important to note that home loan on agreement value is not the only factor lenders consider when determining your loan amount. They will also take into account your credit score, income, and other financial factors.
So how can you ensure that you get the best possible home loan on agreement value? Here are a few tips:
1. Shop around for lenders: Different lenders will offer different terms and rates for home loans on agreement value. Do your research and compare offers to find the one that best suits your needs.
2. Negotiate with the seller: If the seller is willing to lower the purchase price, this will bring the agreement value down and potentially increase the amount of your loan.
3. Consider a higher down payment: A higher down payment will reduce the loan amount and increase your chances of being approved for a loan on agreement value.
In conclusion, understanding home loan on agreement value is an important aspect of the home buying process. By doing your research, negotiating with the seller, and considering a higher down payment, you can increase your chances of getting the best possible loan amount for your new home.