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Mortgage 101

Mortgage 101

The following outline highlights the important links and resources that are contained in this comprehensive homeownership education website:

Click on the topic headline to learn more about each section.

1. Mortgage Basics:

istock_000003861211xsmall-300x198 What is a mortgage, and who actually owns my home once I’ve secured a loan to purchase it? Whether you’re a first-time homebuyer, or an experienced investor, you may not realize that there are at least 20 top mortgage-related terms that every buyer should understand before speaking with a real estate agent or loan officer. In this section, you’ll find highlights of the basic math concepts and topics of interest that will help prepare you for your home buying and financing journey.… more about (Mortgage Basics)


2. Mortgage Approval Process:

 A maze with curious puzzle clouds... To qualify for a mortgage, a few of the most important factors banks consider when evaluating a borrower for approval are the required down payment, the borrower’s income and employment history, and their credit standing, reflected as credit scores reported by the major credit bureaus. Prior to gaining final approval however, there are actually several questions loan officers need to ask before a simple pre-approval letter can be issued. Being prepared with the proper documents and personal information will allow you to spend more quality time with your loan officer addressing the important points of your pre-approval, property residence type and mortgage program options.… more about (Mortgage Approval)


3. Understanding Your Credit:

istock_000008272065xsmall Your credit picture plays one of the largest roles in the mortgage approval process, so it’s essential for every potential homebuyer to understand how credit scores are calculated and measured. Should you close all your credit cards or keep them open? If you don’t have any credit history, could you use your cell phone and utility bills as ways to establish history? In this section, you’ll learn the importance of understanding your credit history, along with the basic rules about how to prepare your credit standing before speaking with a lender for a qualification.… more about (Understanding Credit)


4. Mortgage Payments:

Start saving now for your new house Besides mortgage rates, there are additional obligations that must be considered when figuring out what your monthly mortgage payment will total.  Some of the additional costs typically added to a mortgage payment include Home Owner Association (HOA) Dues, Hazard Insurance, Home Warranties, and Property Taxes.  To allocate a realistic monthly housing budget that aligns with your financial goals and expectations – not to mention your wallet- it’s important to be aware of the most common incremental expenses involved in owning real estate.… more about (Mortgage Payments)


 5. Mortgage Rates:

The word TRUST carved into a stone wall. 3D render with HDRI lighting and raytraced textures. Like the stock market, mortgage rates can fluctuate throughout any given day, influenced by economic and market factors that are out of the loan officer’s control. Determining if you’re getting the best deal possible at any given moment boils down to whether or not you feel your loan officer is looking out for your best interests. When the news media reports that the Fed is decreasing rates, it always seems that mortgage rates increase. Why is that?  And what exactly does points vs no points, and APR really mean? Don’t worry, shopping for the best mortgage program at the best rate that fits your needs and financial picture is not as complicated as it seems.  Here are guidelines that can help you navigate through your mortgage journey.… more about (Mortgage Rates)


6. Mortgage Programs:

programs It’s incredible how many home loan programs have been designed to assist First-Time Borrowers get financing on their first home.  Before you start shopping for your dream home, it could save you time, and potentially, much dissappoint in the long run if you understand what type of lending program best fits the type of property or neighborhood you’re looking to buy in.  Or if you’re looking to refinance your home, you may be eligable for a new government-sponsored mortgage program that’s been developed with current market conditions in mind.… more about (Mortgage Programs)


7. Home Buying Process:

istock_000007453086xsmall What comes first – obtaining approval on the home loan or the purchase contract? Once you’ve debaated the pros and cons of homeownership vs renting, considered the tax benefits and timely market influences, assembling a winning team of real estate and mortgage professionals will ensure you cover all of your bases. For example, there are some very important milestones associated with the mortgage approval process that you’ll need to be aware of, such as getting the home appraised and inspected, along with other factors affecting loan approval dates.  But don’t worry if you’re feeling a little worried at this point, just means you’re actually taking this home buying thing serious!… more about (Home Buying Process)


8. Closing Process:

istock_000002437760xsmall If this were the boy scouts, you would have already received several badges and awards by the time you’re finally closing on your new home. With the right team of home buying professionals at your side, the closing process should be a smooth transition from signed documents to receiving the keys to your home.  The anticipation has been building throughout the entire home shopping experience to the loan approval process, so it’s easy to overlook some important details at the end. Understanding the industry jargon will certainly help prevent feeling like you’re on a roller-coaster when all the team players come together at the end to submit the final docs, signings, pre-closing conditions. However, it’s also important to understand all of the fees associated with a new home purchase….read more about (Closing Process)


9. Real Estate Appraisals:

Mortgage-Image One of the most critical parts of getting a home loan is the Home Appraisal. The purpose of an appraisal is to assess and evaluate the home ‘s value for the lender. An appraisal is a professional estimate of the value of the property that you are wishing to purchase.  Most people are surprised to learn what appraisers actually evaluate when determining the value of a real estate property.… more about (Real Estate Appraisals)

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