Home Mortgage Basics
Want to talk about home mortgage options for your home purchase? Call Wise Advantage Real Estate at 972-829-9040.
Before buying a home, it’s helpful to understand the policies that manage the procedures of securing a mortgage on a property. It’s strongly suggested that you secure a mortgage with an established financial institution. Credit unions and banks have strategic policies in place to educate and advise property owners interested in securing a mortgage with their company.
Important Mortgage Terms
It is significant for a borrower to understand the terms and titles they will come across while securing a mortgage. The borrower is the individual seeking to secure a loan using the property as collateral. The lender is the financial institution lending the money that acts as security for the loan. The principal is the amount to be borrowed. Interest is the charge added to the amount borrowed. Foreclosure is the acquisition of the property upon the failure of the borrower to repay the loan installments as agreed.
During the process of securing a loan it will help you to know who you’ll be dealing with during the home loan process. The loans officer is the person who accesses your credit information to see if you have qualified for the amount you’re requesting. A loan processor prepares your mortgage information and forwards it to the mortgage underwriter. The mortgage underwriter is the person who assesses the eligibility of your request.
A mortgage can be attained directly from the bank, where a hopeful borrower can pay a visit to the loans department. It can be attained indirectly through intermediaries. These people are known as mortgage brokers. As with most steps in the home buying process, knowledge is the first step to securing a loan.
The Mortgage Process
Educating yourself on how to protect your finances is paramount. When seeking a mortgage lender, it’s the best practice to know your options by researching several different companies.
Loan application forms vary from one lender to another, but they all contain common sections. The first section includes information on the type of mortgage you’re seeking. It is beneficial for a borrower to understand the several types of mortgages available in the market. This is where a real estate professional can be of help because they have the experience and training to offer insight.
The next section includes the property information, purpose of the loan, borrower information, employment information, income, expenses information, assets, liabilities, and the details of the transaction.
After filling out an application form, the loans officer will review it and send it in for approval. In some cases, a pre-approval letter is sent that details the likelihood of the institution granting the loan. The letter commonly includes the estimated loan amount. This is a good indication that the mortgage process is close to completion.
Among the documents the loan officer will give you once the loan has been approved include the Truth In Lending Disclosure Statement, Good Faith Estimate, and the HUD-1 Settlement Statement as required by the law. They are used to protect the borrower.
It is important to think of the future when trying to secure a mortgage. This is due to the extended period it takes to repay the loan. Be realistic about your financial situation, your current savings, and the amount of your debts.
Don’t go in to the process blind. Do your research ahead of time and know what your credit rating is and how it impacts a possible decision when it comes to a mortgage loan.
Make sure all your information is current and correct. Providing information that isn’t accurate or that is false will only cause complications and slow down the process.
Ask questions. Having an experienced real estate professional on your side throughout the home buying process can take some of the stress away. They have the knowledge to answer your questions, and you may find they answer questions you didn’t even think to ask! Give Wise Advantage Real Estate a call today at 972-829-9040.[wnt_featured keyid=”1″ autoplay=”false” direction=”left” speed=”5″ ownertype=”agent_broker” maxresults=”25″ /]