Buying a home is a huge financial commitment, probably the biggest committeemen most people will make in their entire lives. Before signing on the dotted line, research and compare the different mortgages available and be sure you get the one best suited for you. The applicant can apply for the mortgage themselves or can utilize a mortgage broker or bond originator. Unless you are a mortgage expert, you may want to use a broker or originator to get a mortgage, at least the first time around.
No matter which way you approach securing a mortgage, facilitate the process and put your paper work together. You are going to have to do it anyways so you may as well just do it. The application is standard throughout the mortgage industry and all lenders require about the same information.
Fixed or Adjustable:
The two most common types of home loans are fixed or adjustable. A fixed rate mortgage will remain constant for the duration of the loan and will only change if you renegotiate your loan. The fixed rate offers stability to the payments. An adjustable rate fluctuates from time to time. It may decrease or increase depending on a few economic factors. The adjustable rate may be low at the beginning but there is always the risk the rate will increase. When the rates adjust, so do the monthly payments.
The lifetime mortgage is advantageous for those of advanced maturity. When the mortgage holder is sixty years of age or older, the equity in the home can be released to raise income for the mortgage holder. This allows the capitalization of the available funds but also reduces the value of the property. This type mortgage is perfect for the mortgage holder but may not be so good for the heirs that are expecting a big payday.
An assumed mortgage is a loan taken out by person A and then taken over by person B. That typically isn’t the plan on the part of person A. Usually, person A wishes to relieve themselves of the obligation but instead of selling the property, will look for an interested party to take over the loan. This benefits both parties as it relieves person A of the task of going through the selling process and person B takes over the loan relatively easily. Person B would pay person A a down payment, usually matching what person A paid. That would be the only money to change hands except for the loan payments to the lender.
With a graduated payment mortgage, the payments start low and increase over time. This type of mortgage is popular with young people just starting out in the working world. As time goes on, the mortgage holder will increase their salary and theoretically will keep pace with the increase in payments. The increase is negotiated before the loan is approved and processed. The increases will take place for a certain time frame then the increase will stop and the payments will remain the same.