Nothing makes a man or a woman prouder than having a house to call home. Indeed, statistics show that some people consider home ownership a sign of success. However, getting the money to buy a house is not as easy as it seems because you have to make a lot of decisions that can affect your financial security in the future.
To help you navigate through the process of getting financing for your planned house buying, we are offering a simple guide to choosing, applying and getting a mortgage.
Choosing a Mortgage - A mortgage is the monthly amount that you have to pay keep your house for a certain period of time. There are many types of mortgages to choose from, the mot common of which are fixed-rate mortgages, adjustable rate mortgages, Federal Housing Administration (FDA) loans, and Department of Veterans Affairs (VA) loans.
If you like knowing what your monthly mortgage payment is, then you should choose a fixed-rate mortgage. If you are a risk taker, then you should opt for adjustable rate mortgages, which bases your monthly mortgage payments on current interest rates. Take out an FHA loan if you are buying your fist home and you do not have any money for down payment nor the good credit rating needed to take out a loan. A veteran with no money to put down on a house should take a VA loan.
Applying for a Mortgage - The process of applying for a mortgage can be broken down into three phases: getting pre-approved for a mortgage, making an offer for the property, and completing the mortgage application process.
Getting pre-approval requires finding a lender who is willing to lend you that money that you will use to buy the property you want. Getting a pre-approval is an option but it is must if you are really serious about getting the property since property owners are more inclined to accept offers with pre-approval from a lender. Once the property owner accepts your offer for the property, then it is time to submit all the required to documents to your lender or broker to complete the mortgage application process. This is a very time-consuming task with all the documents you have to submit.
Getting a Mortgage - Once the lender approves the mortgage application, then it is time to submit another round of documents required to close the deal. Here, the help of a real estate agent would be valuable since he or she will be help you prepare the documents needed to close the deal. The real estate again will also help you find a closing agent, a home inspector, and insurance and title experts. You will need these people to complete the documents you need to submit to the lender.
Once the deal is closed and money has exchanged hands, you will receive a note that contains information on your mortgage payments. You will also receive affidavits that will detail what will happen if you stop paying your mortgage. An HUD settlement detailing the financial agreement between you and your lender will also be given to you.