A mortgage is the term for the loan you take out to help you purchase a house. Unless you have several hundred thousand dollars laying around that would allow you to pay in cash, you’ll be taking out a mortgage. We’ll take a closer look at some of the basic terms involved with mortgages to help simplify the process. Contact our team of brokers at The Mortgage Store for help getting started on your path to homeownership today!
The lender is a financial institution that loans you money to buy your home. Typically, when you apply for a mortgage, the lender will review your financial information to ensure they want to take you on as a client. Your financial profile will involve a number of items including, your credit score, income, assets, and debts. This is to help them determine if you’ll be able to fulfill your loan payments each month.
Since you are applying for a loan to buy a home, you are the borrower. Depending on your situation, you might be the only borrower or you might apply with another person who would be a co-borrower. The more borrowers with income you add to the loan, the more expensive of a home you could qualify for.
An escrow account is designed to help pay property taxes and homeowner’s insurance. Not only does this make it easier for you to make your monthly mortgage payments, but it also ensures that there are always sufficient funds to pay these bills. The lender will manage the escrow account and make sure that taxes and insurance are paid. If your mortgage doesn’t include an escrow account, you will be responsible to pay the property taxes and homeowner’s insurance yourself.
When purchasing anything with a loan, you want to get as low of an interest rate as possible. The interest rate is the percentage you’ll pay your lender each month as a fee for borrowing their money. One way to lower the interest rate you qualify for is to check your credit score to see what debts you still have, whether you have too many credit cards, and whether there are any mistakes on your report. The healthier you are financially, the easier it will be to qualify for a lower interest rate.
There are many different types of mortgage loans that come with different requirements and also offer different interest rates and benefits. Some of the most common loans are FHA loans, conventional loans, USDA loans, and VA loans. Talk with your mortgage broker to see which one is right for you.
At The Mortgage Store, we want to make it easy to secure the loan you need to buy your home. Our team offers more than 50 years of combined experience, which means you’ll get the professional and experienced help you need. Whether you’re ready to purchase your first home or your forever home, we can help. Contact us today to get started.