Credit History

Mortgage FAQ

Application Process

Interest Rates

Property Appraisal

Mortgage Loan Insurance

Missing Payments

Refinancing

Home Equity Lines of Credit

Taking out a mortgage encompasses more than just filling out applications and going to interviews. You need to think about your financial future and your current situation. You need to make sure you can make every single payment until the end of the loan. If you miss your last payment, the lender can foreclose on your home. So all those previous payments would have been rent. You also need to think “strategy” – educate yourself as much as possible about mortgages before going to the lender. You need to show them that you know what you’re getting into so you won’t be fooled if they try to pull something. You can always try to negotiate the terms of your loan. Be sure you have plenty of leeway though – meaning have good credit history and a good sized down payment. If you do not have either of these, beggars can’t be choosers right? If you fit into the “beggar” category, go to the FHA and see what they can do for you. There are a multitude of opportunities you can take advantage of.

When you’ve made the final decision to take out a mortgage, you need to choose what kind of mortgage. Mortgages fall into three basic categories

 Search Rates and Refinance your Mortgage

Fixed Rate Mortgage

As the name implies, the mortgage interest rate remains fixed over the life of the loan. You can choose a loan term of ten to thirty years. This will ensure that each monthly payment is the same. The disadvantage of this type of loan is that there is the potential that mortgage interest rates will fall. You will be at your original rate throughout the loan term. The advantage of course is the exact opposite, if rates go up, you still pay the original lower rate you locked in.

 Find the right mortgage for your needs, view mortgage rates, and apply.

Adjustable Rate Mortgage
The name adjustable rate mortgage is a little misleading. The rate does not change every month for each payment. It changes over a period of time. The initial period (usually about 3 years depending on the life of your loan) will have a fixed rate. You will be paying that fixed amount until that period is over. When the initial period is over, the mortgage interest rate is adjusted annually based on market conditions. This works to your benefit if the rates keep falling, but as we all know, the market is unpredictable. You will probably experience some rate increases as well as decreases. There is payment stability in the beginning and then it varies every year. If your financial future is uncertain, this type of loan may be scary because you might not be able to make the loan payment after the mortgage interest rate adjustment. If you plan on being a little more financially flexible in the future, this might be a good idea because you have the chance of getting a lower mortgage interest rate and if it increases instead, you can still manage.

See your credit report online instantly

Balloon Mortgage
A balloon mortgage is like an adjustable rate mortgage in that the initial payment period has s fixed mortgage interest rate. However, after that initial period, the remaining balance of the loan is due. You can either pay it all off at the end the initial period if you want, or you can refinance. Most people refinance. Most people who choose this type of mortgage are hoping that their mortgage terms will improve after the initial period. Current conditions might not be favorable, but they need to take out a mortgage at that time, so they choose a loan they do not need to stick to for that long. After the initial period, they can also sell the home.  

 Rent vs Own Calculator: Calculate the difference between renting a property and buying a home.