What Is A Mortgage
A mortgage is a loan to purchase a property that is used as collateral to guarantee repayment of the loan
. The
mortgage is a legal agreement signed by the lender and the borrower on the property, and the lender can foreclose on the property if the borrower does not repay the loan as per the agreed terms. It is basically a loan that you promise to pay with interest and other costs. If you cannot keep your promise, the lender has the legal rights to foreclose the property. The loan is often paid through monthly instalments that may include the principal, interest, taxes and insurance.
These are some of the terms that relate to any type of loan you get.
Principal is the amount of money you may be offered.
Interest rate is a percentage value of money charged by the lender on the money borrowed.
Taxes are property taxes that are charged based on a percentage of the value of your home.
Insurance is the amount that covers your home and your personal property against losses from fire, theft, bad weather and other causes.
The first step in dealing with mortgage is to find a good lender. There are numerous lenders who can offer you with some great mortgage plans. You may choose
online mortgage, as it can save your energy and time. Online mortgage deals may involve the following:
Collecting information from you over the phone and via email to determine which mortgage schemes will best suit you.
Knowing the lenders requirements and criteria to offer loans before applying.
No personal appointments required for the illustrations.
Time saving on application processes.
Availability of online counseling, mortgage charts and calculators to find the best deal that suits your needs.
You may apply for
mortgage loans after you are done with the research on mortgage deals. You may apply for a loan all by yourself or get the help from mortgage brokers. The size of the loan, the interest rates, and the monthly payment methods can vary with each lender. So, a thorough survey on the offers available and comparison of quotes from the lenders may help. Applying for a mortgage loan may involve the following steps:
Obtaining your credit reports and updated FICO scores before applying for the loan, as your credit scores are important to get low rate deals.
Collecting your personal financial information namely, your pay slip, tax return papers, credit card bills and papers of other loans if you have any.
A small home work on how much you can afford monthly for a mortgage.
Studying the market indices to decide on the type of interest rate to opt for.
Requesting for the loan quotes from various lenders.
Comparing the received quotes and deciding on which to choose.
Narrowing your search, by seeking help from experts and mortgage brokers.
These are some of the requirements for applying for a mortgage. But, you may need a thorough study on the chosen mortgage standards and terms. Make sure that you can afford the finance your mortgage needs; else it may cost you your new home.
by: Ask Bill
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