A mortgage is essentially a loan, usually given by a bank, to provide individuals and families with funding to secure housing. Mortgages fall into the larger category of financial loans, but are specifically designed for real estate. Mortgages contain several different components, which include collateral, principal, taxes and insurance.Continue Reading
Mortgages vary in amount and have different payment options. Most mortgages operate on 15 to 30 year time periods, and allow borrowers to make repayments typically on a monthly basis. The amount of time allotted for repayment varies depending on the size of the mortgage and the lender, and typically requires repayment of the original amount of money loaned and an additional interest fee.
Mortgages are typically established during contracts when homeowners purchase new homes. As with the new home, buyers sign a legal contract upon securing a mortgage, which acknowledges that they understand to the terms of the loan and will make repayments as indicated. This legal promise, which includes repayment of the loan and all additional fees, uses the new home as a collateral for the loan. Upon signing a contract, owners agree to repay the original loan amount, called the principal, and interest, which is calculated in a percentage, and is called the interest rate. Most lenders penalize for late payments using a system of points, and may even foreclose on a home.Learn more about Credit & Lending
The maximum FHA loan amount for 2015 varies according to the type of housing structure and the borrower's state and county of residence, according to FHA.com. A list of lending limits by state and county is available at FHA.com.Full Answer >
To get a home loan from the Veterans Administration, obtain a Certificate of Eligibility by submitting appropriate documentation, find a lender that participates in the home loan program and locate housing that meets your needs, as the U.S. Department of Veterans Affairs describes. Negotiate a purchase agreement with the help of a real estate professional. Finally, apply for, process and close the loan with your lender's help.Full Answer >
As of 2015, applicants applying for a housing loan under the Home Development Mutual Fund must meet certain age and membership eligibility requirements, according to the Pag-IBIG Home Development Mutual Fund website. Loan applicants also undergo employment and credit background checks prior to approval.Full Answer >
The first step in qualifying for a Fremont Bank mortgage loan is prequalification, in which prospective borrowers submit basic information about their financial status to the bank, states Fremont Bank. Then, the bank conducts a free analysis of this information, including income, assets and debt, to estimate how much potential applicants may be able to borrow. This step doesn't include a credit check. The next step is preapproval, which requires a mortgage application, a credit check and financial documentation.Full Answer >