Looking for a home mortgage loan, but don’t know where to begin? Look no further!
What is a Home Mortgage Loan?
A mortgage loan is where the real estate of the borrower is used as collateral for the loan. Should you default on the terms of your loan, the real estate/property will be seized. You sign a mortgage, or Deed of Trust, which pledges your honor on the loan, lest your house be taken.
Home mortgage loans are generally for people buying a home, and are usually long-term. There are many different types of loans you can receive; depending on the certain situation you are in. Before you choose one, you should review your credit, speak with lenders/banks about what would be your best options, and figure out how much your home is worth and what you need the loan for.
Who Can I Borrow From?
There are several mortgage lenders that offer home loans, including Countrywide Financial, Lending Tree, Wells Fargo and other banks, as well as Fannie Mae. Be sure to consult each lender to see which can provide you with the best loan for your situation.
Different People, Different Situations: Getting the Best for What You Need.
If you are a first-time homebuyer, the process of buying a home can be very overwhelming. However, lenders and banks give extra help for first-timers. Many overlook such things as: past credit issues, bankruptcy, housing history, and property types. First time buyers can also put down less money on the house than second or third buyers, and may not need cash reserves.
For those with a good to excellent credit history, the best option would be a home equity loan. This is a type of loan where the borrower uses the equity (value of the owner’s interest in their property) of their home as security or collateral for it. There are two types of home equity loans: open end and closed end. Open end loans are where borrowers can choose how often and at what times to borrow against the equity of the property, while a closed end loan, the borrower receives a lump sum once and cannot borrow more.
Bank home mortgages are increasingly popular these days. Though the process is generally the same for private lenders and banks, banks usually offer a better interest or time frame in which to pay back the loan. This will mean that the bank holds the mortgage to your property. There are many banks that offer home mortgages, such as CHASE, US Bank, and Wells Fargo. Bank mortgages are often more convenient, allowing for online payments, easy calculators for home equity and online resources.
Another option for homebuyers is a manufactured house, which cost less than other types of houses. Manufactured homes are also known as mobile homes or trailers. They are becoming more and more popular with low-to-moderate income homebuyers. When dealing with manufactured home mortgages, there are two ways to receive aid: through a mobile home mortgage loan, or a personal property loan. If your home has a permanent foundation, you apply for a general mortgage loan for the land/lot and your home, or just one. A personal property loan is provided for those homes that rest on rented lots, such as in a mobile home park.
If you are looking into a second home, or vacation house, you may need to take out a second home mortgage. Although it may not seem like it, acquiring a second home is much harder than the first. Interest rates and down payments are generally higher on a second home. Also, many lenders and banks make it harder to acquire the second loan, since they have a preconceived notion that people are more likely to default on the second home mortgage than the first. Second home loans are available though; just make sure you will be able to keep up with both houses if you choose to go through with it.