by: TextBroker
In today's world of credit card debt and high rents, it has become normal for young couples to buy their first home in order to begin a stable life style. Family planning and budgeting lists almost always have the mortgage payment at the top of the list. It has been proven that buying a home and making the mortgage payment is cheaper than paying rent. The only plus to paying rent is that when something goes wrong you just call the landlord. In home ownership there is no one to call. A new hot water heater or a serious electric or plumbing problem will be all yours to fix, but the pride that goes with owning your own home will compensate for that.
With the variety of mortgages that are available today one is sure to find the perfect mortgage company.
The Different Types of Mortgages
There are several types of mortgage that a family could get today. the most common is the farmers Home Administration (FHA) mortgage. With the FHA mortgage the lender is assured of receiving payment for the mortgage. The next most popular mortgage is what is referred to as a conventional mortgage. In a conventional mortgage the lender is responsible for collecting the payments and maintaining the mortgage. Veterans Administration (VA) mortgage loans are also available for anyone who has served in any branch of the United States Armed Forces.
The Different Types of Lenders
There's a wide variety of lenders available that offer several different kinds of mortgage loans. Finance companies and banks are the major ones. Others are the real estate companies whose only business is providing a mortgage service to consumers. There are also instances where one may use a private lender or financial backer.
Beginning Steps to Getting a Mortgage
One of the first steps to getting a mortgage is to know what your credit history is. Begin by getting a copy of your credit report from each of the three major credit bureaus. Currently you are allowed one free copy per year. Look over the reports and make any corrections that are necessary. Then seek a pre-approval from a lender so that you know what price range of home mortgage you are qualified for.
Interest Rates on Mortgages
Currently the interest rates are around five or six percent. Circumstances and the credit history of the one trying to get a mortgage may increase the interest rate. The higher the risk the mortgage company has to take, the higher the interest rate will be. Interest rates also vary with certain types of mortgages. With the fixed rate mortgage your interest rate remains the same for the life of the mortgage. In an adjustable rate mortgage the interest rate will vary acording to the terms agreed upon. Even if you have a fixed rate mortgage your monthly payment may increase each year in keeping with the periodic cost of living increases.
Defaults and Foreclosures
There is always the possibility of foreclosure when the mortgage payer defaults on the mortgage loan. This is similar to repossession as in other credit accounts. The lender uses the property as collateral for the loan. If there is default they can take the home back and resell it. Most lenders would prefer to refinance your mortgage note rather than foreclose on it.
Second Mortgages
If a homeowner runs into trouble in paying off a mortgage, refinancing the property is an option. Usually the current holder of the mortgage will offer refinancing. This may increase the amount of future payments but it at least moves the payment date up so you can get caught up.
Most states have their own set of laws and rules concerning a mortgage that banks and other lenders must follow. Be wary of companies who offer deals or a mortgage rate that seems to good to be true. Reading all the fine print and making sure it is understood should be one of your most important things to do. When signing a contract for a new mortgage, never sign any blank documents and make sure all the figures that are put in are correct.
Your local bank should be one of the first companies you approach for a mortgage.
In today's world of credit card debt and high rents, it has become normal for young couples to buy their first home in order to begin a stable life style. Family planning and budgeting lists almost always have the mortgage payment at the top of the list. It has been proven that buying a home and making the mortgage payment is cheaper than paying rent. The only plus to paying rent is that when something goes wrong you just call the landlord. In home ownership there is no one to call. A new hot water heater or a serious electric or plumbing problem will be all yours to fix, but the pride that goes with owning your own home will compensate for that.
With the variety of mortgages that are available today one is sure to find the perfect mortgage company.
The Different Types of Mortgages
There are several types of mortgage that a family could get today. the most common is the farmers Home Administration (FHA) mortgage. With the FHA mortgage the lender is assured of receiving payment for the mortgage. The next most popular mortgage is what is referred to as a conventional mortgage. In a conventional mortgage the lender is responsible for collecting the payments and maintaining the mortgage. Veterans Administration (VA) mortgage loans are also available for anyone who has served in any branch of the United States Armed Forces.
The Different Types of Lenders
There's a wide variety of lenders available that offer several different kinds of mortgage loans. Finance companies and banks are the major ones. Others are the real estate companies whose only business is providing a mortgage service to consumers. There are also instances where one may use a private lender or financial backer.
Beginning Steps to Getting a Mortgage
One of the first steps to getting a mortgage is to know what your credit history is. Begin by getting a copy of your credit report from each of the three major credit bureaus. Currently you are allowed one free copy per year. Look over the reports and make any corrections that are necessary. Then seek a pre-approval from a lender so that you know what price range of home mortgage you are qualified for.
Interest Rates on Mortgages
Currently the interest rates are around five or six percent. Circumstances and the credit history of the one trying to get a mortgage may increase the interest rate. The higher the risk the mortgage company has to take, the higher the interest rate will be. Interest rates also vary with certain types of mortgages. With the fixed rate mortgage your interest rate remains the same for the life of the mortgage. In an adjustable rate mortgage the interest rate will vary acording to the terms agreed upon. Even if you have a fixed rate mortgage your monthly payment may increase each year in keeping with the periodic cost of living increases.
Defaults and Foreclosures
There is always the possibility of foreclosure when the mortgage payer defaults on the mortgage loan. This is similar to repossession as in other credit accounts. The lender uses the property as collateral for the loan. If there is default they can take the home back and resell it. Most lenders would prefer to refinance your mortgage note rather than foreclose on it.
Second Mortgages
If a homeowner runs into trouble in paying off a mortgage, refinancing the property is an option. Usually the current holder of the mortgage will offer refinancing. This may increase the amount of future payments but it at least moves the payment date up so you can get caught up.
Most states have their own set of laws and rules concerning a mortgage that banks and other lenders must follow. Be wary of companies who offer deals or a mortgage rate that seems to good to be true. Reading all the fine print and making sure it is understood should be one of your most important things to do. When signing a contract for a new mortgage, never sign any blank documents and make sure all the figures that are put in are correct.
Your local bank should be one of the first companies you approach for a mortgage.