Owning your home in these times can seem unattainable. But with a few tips from the professionals maybe your dream home isn’t too far away.

“The decision when to buy a home or condo is solely up to the individual based on the amount of responsibility one wants to take on,” says vice president and head of lending for Capital G Bank Ltd, Kathy Lloyd-Hines. “Owning a home requires a long term commitment, not only for the attention a home needs but also for the commitment that is needed to meet monthly mortgage payments.”

A mortgage is a specific type of loan, usually paid over a longer period of time for a greater amount of money, secured by a property or the deeds of a property. They are also paid back in regular instalments with interest. As compared to a loan, which is when a borrower initially receives an amount of money for a lender, which is paid back in regular instalments.

Applying for a home loan, Mrs. Lloyd-Hines says, is a simple process and it is highly recommended that one apply for a loan pre-approval with the bank assessing the amount of the loan and property value that the client can afford based on their income.

Provided that the Applicant has completed the application form correctly and attached the requested documents, a lender should get back to you within two days to discuss specific needs.

If the applicant doesn’t maintain accounts with the bank, credit references will first have to be obtained by other banks.

“Remember, the key to discussions with a Lender is to be open and frank so that they can get to know you and assist based on your personal needs,” she advises. “Not everyone is in the same financial position and that has to be respected.”

When the time comes to shop around for a lending facility, Mrs. Lloyd-Hines suggests focusing on the institutions reputation for being friendly, considerate and genuine in giving advice.

“Convenience, affordable monthly payments, competitive interest rates and quick responses to your loan applications are all things you should be looking for in a lending institution,” adds assistant vice president for Consumer Credit at the Bank of Butterfield, Shawnette Griffin.

Before you think about applying for your loan, there are a few things to consider.

“One of the most important things to understand before applying for your loan is what your monthly living expenses are and know how much you can afford for a loan payment,” says Mrs. Lloyd-Hines.

Ms Griffin adds: “Having a good credit history is also important to know about in being accepted for a loan. A good credit history is developed by proving that you can meet your obligations to pay back debt that you owe to others; for example, paying off bills and credit cards in a timely manner.

“Using your credit card to pay back loans for things you cannot afford will only increase your debt and harm your credit history on the other hand, having a good credit history, coupled with a growing savings account are key ingredients to meeting future financial goals.”

Many institutions do not believe it wise for a couple or individual to take up 100 percent financing on one asset, their home, and will offer financing at a different percentage of the purchase price of the home and as Bermuda families usually have a relative or friend with an existing property, may accept a guarantee from that family member and take a charge over their home.

For example if a couple need to borrow $850,000 to purchase a home costing $850,000, the Bank will take security in the form of a mortgage over the home that is being purchased for $637,500, i.e. 75 percent, and take a mortgage over the guarantor’s home for $212,500, i.e. 25 percent.

“The simple reason we do not leverage 100 percent on the new home is that one does not know what lies ahead and the impact on their cash flow,” explains Mrs. Lloyd-Hines. “For example, the couple may have a baby who needs home care and the one of the parents may have to forego their job; or they may have a child that would benefit from overseas schooling not according in their cash flow when they took up the mortgage.”

How can the couple afford continuing their mortgage payments or take up another loan when they are fully leveraged?

“Having equity in their home or backing of the family member, one is better equipped under the Capital G mortgage structure so that they can handle the ‘what if’s’ that may arise in life.”