Before we dive deep into the benefits of having a mortgage loan approved, it is essential to know exactly what the term stands for. In the simplest terms, a mortgage loan is a long term investment loan that is given to a borrower by a lending entity (private company or a bank), for the purpose of purchasing a property. The borrower pledges to pay the agreed-upon periodic payments in addition to the interest within a given period. If for some reason, the borrower is unable to fulfill his/her side of the agreement, the property itself is to be considered collateral.
With the above definition, let’s look at some of the benefits that are immediately available to the borrower when he is approved for a mortgage without PMI loan. The first and most obvious, benefit is that the borrower can immediately get ownership of the property even if they don’t have the full price available with them in the form of cash. The borrower/property purchaser is required to make a down payment which is very small considering the overall price of the property. Some owners prefer paying a higher down payment (between 10 to 20 percent) although it is not mandatory, as the minimum payment required based on mortgage laws is just 3.5 percent of the total price of the property. Another benefit of a mortgage loan is that it frees up your monthly schedule for other stuff and you could better manage your finances to plan for the things that matter most at that given time.
An important thing to consider is making mortgage loan decisions after careful planning and consideration. This is a long term commitment and not one without risk, which mandates that the entire financial plan should be carefully studied and all the right questions should be asked prior to making the commitment.