The ugly truth no one tells you About Home Loans


This article is specifically targeted at writing compositions about the concept of HOME LOANS, but before proceeding to the main topic, we’ll need to clear a misconception… Some individuals have the habit of using the terms HOME LOANS and MORTGAGES interchangeably. These two terms are similar but definitely aren’t the same.
HOME LOANS are monies borrowed from financial institutions with the sole aim to attain a house/home, it is actually a kind of mortgage that is procured purposefully to buy a house.

On the other hand, A MORTGAGE is the attainment of a loan (often a large loan) from financial institutions to own property using properties as collateral, in this kind of loan, the lenders can take possession of one’s properties if the loan isn’t repaid at the appointed time.



As earlier talked about, these are loans borrowed from money lending institutions specifically to finance the purchase of a residential building, it is a kind of loan taken to fund the construction or the purchase of a building for human habitation. It isn’t just for new home construction, most times, it is for home reconstruction and upgrades.

We all have the imaginations of our dream homes, the kind of house we want and how we want it furnished, but the sad reality is that most times, we can’t afford it at a go prior to the fact that our earnings either monthly or annually ain’t buoyant enough to finance it. The cost of owning a comfortable and nice home isn’t a thing to toy with, residential property prices are sky-high, and making your wish of owning your dream house might be far out of reach.
After thorough thinking, you’ll probably end up with the decision of opting for a housing loan, trust me, you aren’t alone in this.



Amidst conceiving the idea of applying for a housing loan, there are tons of things individuals are mostly curious about, they tend to ask a lot of questions.
Some questions often asked about home loans are:

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-What is housing or a home loan??
-What are the processes involved in acquiring a home loan??
-What are the factors to be considered before deciding to acquire a home loan??
-How do home loans work??
-Do I necessarily need a partner or a Co-applicant for a home loan??
– What are the documents required for a home loan??

In this manuscript, we’ll be giving appropriate answers to these questions and more.

What are the processes involved in acquiring a home loan??

Everything concerning finance sure has laid down processes and steps to pass through, acquiring a housing loan isn’t an exception.
The procedures involved are:

– Filling out the loan application form and the attachment of the required documents.
– Payment of the Loan processing levy.
– A conclusive conversation with the lending agency.
– Evaluation of the attached documents.
– The approval procedure.
– Site estimation processing
– Finalizing the entire loan agreement.
– Signing the deal
– Disbursement of the agreed loan.

Those processes are the vital processes one can’t skip while signing for a housing loan.

Factors to Consider before acquiring a housing loan.

Before opting for a home loan, there are circumstances to put into consideration, Some of those factors are:

– One’s overall monthly earnings/Income.
– The span of the home loan.
– The Interest rate policy of the lending agency.
– One’s eligibility status.
– One’s monthly financial responsibilities.
– The cost of the housing to be constructed or acquired.
– One’s credit history.
– One’s current and retiring age.
– One’s Current employment status.
– One’s work history.

All of those and more are vital circumstances to consider before proceeding with a housing loan from any bank or money lending institution.

How do home loans work??

The affairs of home loans aren’t a complex structure to deduce. Most interested individuals are usually very curious and desperate to know how home loans operate.
First, it is a given and a well-known fact that loans are given to individuals by banks or moneylenders with an interest rate and a duration, it is also an unhidden reality that loans are meant to be refunded as at when due.
Some home loans are to be paid in portions on a monthly basis accompanied by interest and without default until the agreed loan tenure lapses.

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Primarily, home loans’ significant but unmentioned policy is, that the larger deposit you make during repayment, the smaller the interest rate. Some home loan durations might be as long as 10 to 30 years, paying meager amounts monthly during the repayment of this kind of loan sky highs the interest rate drastically making it weigh more on the loan debtor.

You should know that your purpose in acquiring a loan determines the validity of its disbursement.
The lending agency or the bank would be interested to know how capable you are financial, this is to deduce whether you’ll be able to meet up with the repayment or not.
Meanwhile, Housing loans come with various distinctive attributes which do create a huge difference in the way you should put them to use.

Is a partner or a Co-applicant required for acquiring a housing loan??

In some countries, it isn’t part of the vital requirements to have a Co-applicant before applying for a housing loan, although there are merits of having one.
Having a Co-applicant or a partner provides the lending agency the assurance of repaying the loan without a default since the obligation is going to be held and maintained by two individuals. This factor might serve as an added bonus as it boosts your eligibility of acquiring the loan.
With a Co-applicant, the repayment burden wouldn’t weigh on you as it is a shared responsibility, You can also make bigger and substantial deposits monthly during repayment to cut down the interest rate.
The Front line of this is that it isn’t mandatory to have a Co-applicant, but it is helpful to have one.

The required documents for a home loan.

Some documents are very important in the quest of applying for a home loan, these documents are solely needed for effective and efficient paperwork for the home loan processing. Some of those important documents are:

– Bank and substance statements.
– An ID (either a national identity card, a passport, or a driver’s license with a photo ID).
– History of rent (renting history).
– Attestation of address (either electricity bill slip or a passport).
– Birth certificate.


This part is actually one of the most essential aspects of the concept of HOME LOAN to always study and have a vast knowledge about before venturing into home loan acquisition, if not the most essential.
Acquiring home loan tips could turn into one’s greatest nightmare, as not every home loan debtor ends up repaying the loan within the stipulated duration. The beginning of the end for a home loan debtor is DEFAULT, constant default can land a debtor into a pit filled with troubles and torment of the lending agency.

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Below are some horrifying realities of home loan tips:

Interest rate:
Some lending agencies and banks accompany the loans they give out with horrendous interest rates which can prompt a debtor into default.
Aside from the horrendous interest rate, there are untold latent levies that the debtors will be obligated to pay, this will weigh heavily on anyone as paying debt with interest in portions monthly isn’t a child’s play. The interest rate movement of most home loans is very volatile, some banks might tend to increase their interest rates and thus action will definitely have a toll on the principal loan.

A housing loan is a long-term and time Obligation:
As earlier discussed, home loans could last up to 10 to 30 years, the commitment is long and on the long run, it might get unbearable and draining as the economy and one’s financial buoyancy cannot always be favorable. Even at this, the lending agency or the bank doesn’t care whether it is becoming a burden or not as they still expect you to meet up with the end of the initial bargain.
It gets pretty exhausting to be obligated to the repayment of a loan acquired over a decade ago, but a debtor is always left with no other option but to pay the loan with interest without a single default.

Opportunity loss and repossession of debtor’s assets:
The aftermath of failing to pay the loan within the stipulated duration is indeed very horrible and unimaginable, banks or lending agencies will take possession of one’s asset/assets of value if the loan agreement is crossed.
They may also include additional fines if a default is recorded in the debtor’s loan record book.

All of those and many more are the ugly realities and the sad truth of home loan tips that everyone deciding to acquire must know and get ready for.

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