When it comes to taking a mortgage, there is some information you need to have a basic understanding of, so that you’re able to make the right decision. We will explore some of this below.
What is the process of getting a mortgage?
The first thing you need to do is shop around for a good bank or mortgage lender. There is a lot of information online and the top lenders will be easily accessible on the internet. You can also talk to people who have bought homes and ask them for recommendations on different lenders. Realtors and real estate agents also have very good information about this and you can also take advantage of their networks to get the right lender.
Find out what kind of mortgages they offer, what costs are come with the mortgage, how long approvals take amongst other factors.
Are there particular documents you need when applying for a mortgage?
This varies from lender to lender, however, some of the more common ones include your social security card, proof of income, drivers license, and bank statements, among others. Talk to the mortgage lender and he’ll be able to give you a full list of the documentation you need to have when you’re making the application. This should be done during the shopping around process because you will talk to many lenders as you try to find out more about the mortgage terms.
What is pre-qualification and how is it different from pre-approval?
Pre-qualification basically shows how much you can borrow. It considers factors such as low income, your debt portfolio and what assets you have. A pre-approval, on the other hand, is the commitment by the lender to give you a certain amount of money. This is the stage at which you should aggressively get into the market and look for the house you want because now you know how much you can spend.
How will I know the right mortgage for me?
There are so many types of mortgage available in the market and you need to have a good understanding of what each entails. The choice of the mortgage will depend on how comfortable you feel making the mortgage payments. Some have very high-interest rates, while others depend on the market fluctuations to determine how much interest you pay. Talk to your mortgage broker and let him take you through all the options available before you commit yourself.
Can a first-time homebuyer access mortgage?
Yes, you can, the whole process of getting a mortgage really depends on your credit standing. If the lender sees that you have healthy finances as per your credit score, they will be willing to give you a mortgage.
What type of interest rates are there?
There are two major types of interest rates available. Fixed rate interest does not depend on market fluctuations and you pay what you agree upon at the beginning of the contract. Adjustable interest rates depend on market fluctuations and will vary according to how the market is doing. Each of them has their benefits and you need to be fully aware of what they are before you decide which one to go with.