By Sandra Bergmann at September 28 2018 11:25:51
If you are planning to build your own home, the entire process can be extremely overwhelming. There are very few projects you or anyone else can take on that are more stressful and more prone to problems. One of the most dizzying aspects of building your own home is having a grasp on all of the legal agreements and contracts that you will need to enter into to get the job done.
A loan agreement is the document which represents the formal evidence of a loan. The document also includes important details such as covenants, positive or negative ones, the information on the collateral such as loan type and its value, as well as guarantees, the applicable interest rates, fees, the conditions according to which the loan is to be repaid, and the period of repayment envisaged.
It is important to note that some banks do report deferred payments as delinquent. Therefore, it is crucial to ask lenders how they report to credit bureaus before entering into a contract. Payments reported as past due can reduce FICO scores. Depending on credit scores, a reduction of ten points can place debtors in a lower credit category; making it difficult to obtain credit in the future.
Borrowers should create a folder to store loan document records, along with a record of phone and email correspondence. Always keep track of phone conversations by writing down a summary of the call, date, time, and name of the bank representative spoken with. When important documents are mailed, invest in the extra protection of tracking receipts. Certified letters should be sent with a return receipt request in case it is necessary to provide evidence the documents were received.
The loan deferment process involves contacting the lender, submitting a deferment application, and undergoing the application process. The actual process can vary by lender. Other factors taken into account include the borrower's credit history, type of loan, and number of payments being deferred. Approval can take less than 24 hours to several weeks.