How to Choose the Right Mortgage by Debra Presley
Wednesday May 11th, 2022
Obtaining a mortgage can be intimidating and confusing. I have outlined the mortgage process for you in four easy steps!
Step 1: Mortgage Application
Before an application gets filled out, it's important to assess yourself financially. Figure out how much of a down payment you have and how much you need to borrow and how much you can afford so that when you apply for a mortgage, you will be able to sustain yourself financially. A mortgage associate will then take an application by phone, in person, or online. Once it has been received, the mortgage application process will begin by verifying your information.
Step 2: Choose the Right Mortgage Program
Mortgages come in all shapes and sizes, as houses do. Pick a loan that is more aligned with your financial situation and goals. Here are the four basic types of home financing loans;
A. Fixed Rate Mortgage
Fixed-rate mortgages have terms that can last from one year to ten years. The interest rate and payments will remain the same for that specified term.
B. Adjustable Rate Mortgage (ARM)
An Adjustable Rate Mortgage lasts from three to five years. During these terms, the interest rate can go up or down, which means your monthly mortgage payments can increase or decrease.
C. Combination Rate Mortgage
A Combination Rate Mortgage combines fixed interest rates and adjustable interest rates. Monthly payments can also increase and decrease.
D. Lines of Credit (LOC)
Utilizing a LOC is becoming an innovative way to finance a home purchase. You can take the amount you need from the credit limit you were granted. You only pay the interest on what you use, and this money can be put towards things like home renovations, a child's education and debt consolidation.
Step 3: Mortgage Submission and Approval
Once you select the appropriate mortgage program, you will submit the information to your mortgage associate and other required documentation. You will then wait for the mortgage approval from the mortgage associate either through email or text. After the approval, the associate will also review your commitment to the mortgage. Any additional documents required by the lender should be sent to the associate no later than ten days after approval.
Step 4: Lawyer
The associate will send the mortgage instructions to your lawyer to review and sign the documents. First, you will review all the terms and conditions before signing to ensure the interest rate and loan terms are what was promised. Double-check to see that the names and addresses are correctly spelled on all the documents. Signing takes place in front of a Notary Public or Lawyer. There will be several fees with obtaining a mortgage and transferring property ownership which will be paid at closing. Bring a bank draft for the down payment and closing costs if required. You will also need to show your homeowner's insurance policy and other requirements such as flood or fire insurance and proof of payment.
Post a comment