What is a mortgage?
Mortgage belongs to real state, mortgage is a type of a loan or a legal agreement for helping those people who are interested to invest in property. Bank helps them to pay property amount to the owner or builder and bank takes its money back within a long term period with interest. The amount of your loan will be determined by your home’s value.
Mortgage loans are secured by a borrower’s home. This means that if you are unable to make the monthly payment for the mortgage, the lender can foreclose and take your home.
Example of mortgagee.
Suppose a person is interested to buy a home, but he does not have enough money.
In this case he can apply for mortgages. The bank will divide your loan amount into easy instalment, that you will pay monthly. In this way a person can buy homes with easy instalment.
The bank will must take its amount back with interest and in case you failed to pay the instalment amount, than a bank will lock your property and take in its custody. The interest rate may be fixed or variable during loan period. You can read about interest in agreement deed.
A mortgage loan is usually 20 to 50 years, mortgage loan interest depends on the market if there are many buyers in the market than the loan interest goes height and if there is less buyer at market, than loan interest will be cheap.
Where you can apply for mortgages.
There are many banks who provide mortgagee loan, but all bank's interest are different, and processing fees. The processing fee is, a basic charge of your loan, that you have to pay. It is normally 1 to 2 percent of the loan amount.
Many property sellers provide its own mortgagee loan with some attractive offer.
Before applying for a mortgage.
- Before applying for a mortgage, you must decide on your budget, how much mortgage you can afford. It depends on your monthly income and expenses. You can use mortgage calculator. It helps you to plan.
- Read mortgage agreement carefully, and highlight important point and in case you not able to understand any paragraph than ask with your leader.
- Check interest rate are fixed of variable.
- Must try with different place, and try to find an interest rate and filing fees.
- Try to find hidden cost charged by the lender or bank.
- It is a big long step to buy a home, so take time to investigate each and every thing.
- Once you have decided about the amount to borrow, take time to figure out what amount you can afford for a monthly basis payment on your budget.
- Do not sign any contract until you have read it, your questions have been answered and all blank spaces have been filled in.
- Make sure the loan payment and terms you were quoted agree with the loan payment and terms stated in your loan agreement or note.
- You have the legal right to cancel a credit transaction on a refinanced, or a consolidation loan within three business days from the day the transaction is completed or closed.
- You have the right to change your mind on a home purchase mortgage loan at any time prior to the loan closing.
- You can lose your home if you don’t make the payments on your mortgage or home equity loan.
- Know the Terms of Your Loan Before You Sign
- Just because a lender is willing to make you a loan doesn’t mean that it is the right loan for you. Take the time to know and understand all of the terms, conditions and costs of a loan before you sign the contract. Use the list below to review mortgage offers that you receive. Be sure to comparison shop and talk to more than one lender.