Are you in the market to buy a new house? If so, that likely puts you in the market for a “mortgage” too. While many of us may be aware of what a mortgage is, for those who do not know, a mortgage is a loan specifically designed to purchase a house. Your mortgage lender loans you a large amount of money which you must pay back over a set period of time, with interest. Let’s look at what getting a mortgage involves.
How does a Mortgage Work?
Typically, a bank or a private mortgage lender loans you an amount that is, often, 80 percent of the price of your home. If you are unable to pay back the amount -with interest – over a set time period, the lender can take over your home by using a legal process called foreclosure. So your house is the collateral for the loan. While banks are the traditional mortgage lenders, credit unions, government agencies, and some pension funds also offer mortgages. Prior to the 1930s when mortgages got their start, only four out of every ten Americans was a homeowner. Mortgage loan terms at that time required a big balloon payment after a repayment schedule that was spread over only three to five years. By 1934, modern mortgages had come into being.
The down payments, or the money you paid upfront that reduced the amount you needed to borrow, could now be as much (or as less) as you wanted. Typically, this amount is 20 percent of the purchase price of your home. Mortgages can be different depending upon the interest rate. A fixed –rate mortgage has an interest rate that does not change over the entire life of the loan, which is typically 30 years.
An adjustable rate mortgage (ARM) typically changes once a year depending upon changing market conditions. Mortgages can be of other types as well- Reverse Mortgages for those 62 years of age or older which provides a way for retirees to tap into their home equity to have an additional stream of income, FHA Loans, Jumbo Loans, VA Loans, and Conventional or Conforming Loans.
Basic Loan Information from Nationwide Home Loans (NHL)
Located in Fort Lauderdale, Florida, NHL is a leading mortgage lending firm reputed for its high quality of service. We offer the best rates and are committed to fitting you with the most suitable loan for your needs. Here is some useful information about loans to help you feel at ease with the entire mortgage process.
If you go to a big bank for a loan, you will be treated as just another customer. You will not have easy access to the person in-charge of your mortgage who can answer your questions and offer you the best plan(s). So you may be left wondering if you are making the best decisions and getting the best plan. At NHL, you can expect just the opposite. Not only do we provide great options, the loan officer assigned to you will help you through the entire financing process that we have in place.
The first step in mortgage lending is to assess your needs, your finances, and your qualifications. Once these have been discussed, the application process starts. After approval, an appraisal of your new home is done to establish its market value. The next step is the underwriting approval, after which you sign closing documents and enjoy your new home. With the help of our loan officer, processors, underwriters, and closing department, your loan process will flow quickly and smoothly.
At NHL lending we offer many types of loan options. Whether you are a veteran looking to get a VA loan, a retired person looking for a reverse mortgage, or interested in a conventional loan- we offer all this and more. Our loan officer can discuss your unique situation and help you decide the best mortgage loan for you. It is also a good idea to find out about the different loan types to help you decide what is best for you.
As a borrower, you have certain rights and responsibilities. Shop around and compare charges of different lenders. Make sure you understand all loan terms and conditions, payment plan, interest rates, fees, etc. before you commit to anything. Having relevant documents handy will also help you to get through the loan process without any delays. Pay off any debts or long-term loans that you may have before applying for a mortgage loan.
Above all, having an experienced professional on your side can be invaluable in getting you the best loan. For conventional loans, for example, we offer the best conventional home loans in Fort Lauderdale, FL, and if you meet the strict requirements, you could soon be on your way to becoming a homeowner!
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