All About Mortgages
Unless your rich uncle made you his sole beneficiary or you happen to have a few hundred thousand dollars worth of change in your couch cushions, you’re going to need a mortgage if you want to buy a house.
So what exactly is a mortgage?
Put simply, a mortgage is a loan that helps you finance the purchase of your house, using the home as collateral. You pay the loan back over the next ten to thirty years.
It’s important to get pre-approved for your mortgage before you start shopping for a home. After all, it’s a competitive market out there, and you need all the advantages you can get. Not only will pre-approval let you know how much home you can afford, it will also let the sellers know you’re serious when you make an offer.
Here are a few mortgage terms you’ll want to know:
- Down Payment – The amount you’re putting down on the house. Typically, lenders want you to put 20 percent down, although we have several programs that allow you to make a smaller down payment.
- Principal – The amount of money you’re borrowing, not including interest.
- Interest – The amount the lender charges you to borrow the money. The longer the term of the loan, the more interest you’ll pay.
- Fixed-Rate Mortgage – The interest rate stays the same for the life of the loan.
- Adjustable-Rate Mortgage (ARM) – The interest rates starts low, then adjusts upward after a set number of years.
Seems easy enough, right? Probably not. Don’t worry if you still have questions. That’s what we’re here for. Because we