What is a mortgage
In simple terms, a mortgage loan or mortgage is a loan in which the House operatesas a guarantee. The Bank or lender gives a significant amount of money, which will bethe borrower or the home buyer to return, together with the interest and Commissionin a period of time. If the mortgage is not paid as agreed, the lender can takepossession of the House in warranty.
There are several types of mortgage loans available, and is best for a buyer to takenote of your financial situation and plans in the long term. Some people plan to stayin a House for 30 years, while others are investments in the short term to move up theproperty ladder estate.
Please note that the rate of interest (fixed or variable) is important, and next to theterm of the loan, determines the total cost of the loan, and the monthly fee.
And between interest rates that we offer we have:
Fixed interest rate: the interest remains fixed and unchanged during the life of themortgage loan. I.e. If they raise or lower rates of market interest, the interest of yourmortgage and your monthly payments will not change. Normally you can make loansof 15, 20, 30 or even 40 years. There is a stability long-term interest mortgages fixedspecially for that plan to stay in your home during a decade or more.
Type of variable rate or adjustable rate (ARM: Adjustable Rate Mortgage): is subject tofluctuations in interest rates. It usually has an initial period where the rate is fixed, butthen the rate is resettable, every year or every half a year, depending on the behaviorof market interest rates. Persons seeking possible lower interest rate for a short timein adjustable-rate mortgages have an option to consider.
Where get a mortgage in the U.S.
As in most countries, banks are those who traditionally offer mortgage loans. Butbanks are not the only source of mortgages, credit unions, some pension funds andvarious government agencies also offer mortgages.
You can start applying for a mortgage in the Bank that uses for your checking andsavings account. It is comparing the offer of mortgage loan from several banks tochoose the best interest rates and terms.
If you don't have the time to go to various banks, you can work with a broker ofmortgage (mortgage broker). These work with several banks or financial institutionsthat offer mortgages. Even if you are working with a mortgage broker, it isrecommended to also do a search for your side of some mortgage alternatives.
How to apply for a mortgage
Evaluation
When you apply for a mortgage the lender will look at your employment history andcredit history as indicators of risk which means lend you the money. Try to show thebest track record for achieving the best conditions, if possible try to prepare them inadvance:
Credit history: the late payments during the last two years of your credit report,especially if they are more than 30 days of mora, or the non-performing loans duringthe past six months credit cards are indicators of risk. The entire credit market hasbeen adjusted for several years. The mortgage lenders give better interest rates toborrowers with credit ratings high (760 to 850) and those who make a significantdown payment (20% or more).
History of income: lenders looking for steady employment during the past two years.It is an advantage if you has been with the same employer for at least that long.
The following is a typical list of the documents and information you need to apply fora mortgage:
Applicants Social Security numbers.
W-2s from the previous two years.
Ballots of recent payments.
Contract of sale signed by the buyers and sellers
Full address of the last two years (including the full name and address of the ownersin the past 24 months)
Names, addresses and all income accrued by all employers for the last 24 months
Numbers of account, monthly payments and balances current of all loans and creditaccounts
Account numbers and balances of all deposit accounts, such as checking, savingsaccounts, stocks and bonds accounts
Approval
Once the credit is approved you will have some time to close (execute thetransaction). You must have money from close to this date. Lenders will provide youwith an estimate of bona fide (Good Faith Estimate) of closing costs within three daysof receipt of your request. It is time that you can negotiate. You can also be able tonegotiate with the seller so that it paid part of the closing costs
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