Home Mortgages

Understanding The Process

"Just right!" You've been looking at houses for months and months, and you have finally found it, the house that's "just right!" . Now you're anoxius to buy your new home, move in, and get settled. But you still have an important task ahead of you getting a mortgage loan.


I'll help to explains the process of dealing with mortgage lenders and brokers. it tells you where to look, what to look for, and what takes place when you apply for a mortgage. Knowing what to expect, especially if you are a first-time homebuyer, may make it easier for you to get through the process.


You'll also learn about your legal rights to fair lending and the fair treatment you have a right to expect. The fair Housing Act and the Equal Credit Opportunity Act make it unlawful for a lender to decide whether you qualify for a loan, or to offer less favorable terms, for some reasons such as your race, national origin, sex, and other prohibited factors.


Where to Shop and What to Look for


Once you have found the home of your choice, you may think that shopping days are over. Only the first phase has benn completed. Next comes finding a mortgage and payment terms that fit your budget. Where you shop and what you look for are important.


You might start by looking for a mortgage at the bank where you have your checking or saving account. But don't limit yourself. A wide ariety of institution make home mortgage loans, including saving and loan associatations, commercial banks, mutual savinf banks, and mortgage companies. The mortgages these institutions offer will have varying features. One way to find the lender or broker with the most attractively priced loan is to look in your local newspaper; check to see if it publishes a shopper's guide to mortgage credit. these shopper's guides are avaliable in many locations anda can be used to identify the lenders with low rates. But, basically the way to find the loan with the most attractive terms is to shop around.


You should have in mind some of the things to look for in a mortgage loan. For example, what types of loan are avaliable from a given institution? Does the lender make privately or federally insured or guaranteed loans? Some lenders offer mortgage loans backed by federal agency such as Federal Housing Administration (FHA loans) or the Departement of Veterans Affairs (VA loans). Loans that are not government-insured are called conventional mortgages. Insured mortgages may be more attractive than conventional mortgages in some ways, such as lower downpayment requirements. But they may be more restrictive in other ways; for example, they may be avaliable for only certain kinds of homes, or for properties whose value is below specified price.

Other factors important to your conventional mortgages decision are the length of the loans and the downpayment required by the lender. The longer the term and the larger the downpayment, the smaller your monthly payments will be.

The interest rate is important too, and in som cases the amount of the downpayment will influence the interest rate that you pay ( the larger the downpayment, the lower the interest rate). In addition, a mortgage loan may have an interest rate that will stay fixed for the life of the loan (fixed rate mortgage), an interest that may change (adjustable-rate mortgage or ARM), or a combination of fixed and variables rates (hybrid mortgage). The initial rate of an ARM is generally lower than the rate may change during the life of the loan. Don't hesitate to ask the lender or broker how one loan differs from another, how the different features of the loan will affect the mortgage, or whether your chances to qualify would improve if you made a higher downpayment.

When you're shopping around, you will find that some home mortgage lenders have special programs to assist veterans. low income homebuyers, or first-time homebuyers. Ask the lender or broker if such programs are avaliable.