You may find yourself asking the question “What is a mortgage?”. That question usually comes alongside another question: “What is a home mortgage lender?”. These questions are answered in the video.
Watch and read on to learn more.
For starters, a mortgage is a loan financed by a bank or other financial institution that a person can use to finance the purchase of a home. A mortgage differs from other loans like student loans because the bank will use the home as collateral. This means they can take the property if payments are not made. The first step when going over a mortgage with a home mortgage lender is the downpayment. This is the amount of money a person pays up front when getting a mortgage. Usually this has to be 20% of the total value of the home.
The lender will then review the potential borrower’s credit reports and income statements to determine if they qualify for a loan and how much they qualify for. If approved, the fixed interest rate will be decided and that is usually set at 5%. Then the length of term of the mortgage as well as the amortization are decided upon. Most people go for a 30-40 year amortization.
If you have any further questions about mortgages, contact a home mortgage lender for more information.