How to Purchase a Home with a Mortgage

Having a home is a dream for many in America. Home mortgages have made it easier to accomplish owning a home.

What is a home mortgage, and what is its importance?

Paying for a house all at once is usually very difficult. A mortgage is a type of loan for buyers when they don’t have enough funds to purchase a home with cash. It requires a certain amount of down payment, and the leftover cost of the house is financed with a mortgage. There is a set amount to pay each month over a certain period of time.

How does a home mortgage work?

A mortgage loan is divided between a buyer (you) and a lender (a bank or financial institution). The buyer borrows money (total cost of the house) from the lender, and in return, pays back the amount at a specific interest rate. The mortgage lender decides the interest to be paid off in monthly installments depending on different factors. Typically, mortgage loans last for 15 or 30 years.

On the contrary, a reverse mortgage for purchasing a home is also available for senior citizens. They are free to convert their home equity into an income without paying any monthly installments.

What are the pros of home mortgage?

  • Fixed-rate loan with fixed monthly payments
  • Results in a equity-building investment
  • Tax benefits on home mortgage interest

How do you get a mortgage loan?

Knowing the stages of obtaining a mortgage is essential for a first-time buyer. These are the steps that follow:

  1. Documentation - There are a few critical documents we will need to verify to start your process.
  2. Pre-approval - After receiving your initial documents, we will pre-approve you for a specific loan amount.
  3. Look for a Home - After being pre-approved, you are ready to go look at houses with your Realtor. When you find your home, make an offer.
  4. Appraisal - The appraisal insures the home you are buying is worth the price that is being offered.
  5. Initial Underwriting - The Underwriter will verify that all information is accurate and authentic.
  6. Conditional Approval - Conditional Approval is granted when the Underwriter approves the loan under certain conditions.
  7. Clear To Close - The Underwriter verifies that all documentation has been provided and all conditions have been met.
  8. Closing - Signing the final documentation and receiving the keys to your new home!

What is a mortgage note?

A mortgage note is a contract including interest percentage, rate, and the loan term of the borrowed amount that you have to pay back to the lender.

Do mortgage rates affect the purchasing power?

Absolutely! If mortgage interest rates increase by some percentage, it affects the purchasing power. The per month mortgage payment installment will increase. This means you will need to have more income to qualify for the payment. You can make sure you get the best rate by working with a mortgage broker.

Make your dream come true with a mortgage purchase!

Fulfill your dream of purchasing a home by working with a qualified mortgage broker who will find you the best rates.