Beginners Guide To Obtaining Mortgage Quotes

Beginners Guide To Obtaining Mortgage Quotes

Beginner's Guide to​ Obtaining Mortgage Quotes
Mortgage quotes are a​ dime a​ dozen .​
So are mortgage companies,​ running the​ whole gamut from legitimate brokers to​ fly-by-night lenders .​
To make sure you​ get the​ best deal and ensure you​ do not fall prey to​ unscrupulous brokers,​ learn basic mortgage terms and concepts.
Mortgaging 101
Mortgaging is​ a​ complex process .​
Its basic terms and concepts,​ however,​ are simple enough for anyone to​ understand .​
Brush up on​ this little stash of​ knowledge as​ they will come in​ handy in​ your dealings with mortgage companies.
Below are a​ few terms and a​ little explanation of​ what they mean.
Loan Term
The loan term is​ the​ amount of​ time you​ are given to​ repay the​ loan .​
The usual choices are 15 and 30 years .​
Term of​ repayment is​ another word for loan term.
Interest Rate
The interest rate of​ your loan is​ how much it​ costs you​ to​ borrow the​ money .​
This is​ computed as​ a​ percentage of​ the​ loan amount,​ charged over a​ certain period .​
In shopping for mortgage quotes,​ you​ will encounter two types of​ interest rates,​ fixed-rate and adjustable-rate .​
In fixed rate mortgage,​ the​ interest rate stays the​ same all throughout the​ lifetime of​ the​ loan .​
In adjustable-rate mortgage,​ the​ interest rate starts small and gradually increases over the​ loan life.
Additional Fees
In obtaining mortgage quotes,​ you​ will come to​ discover that the​ loan amount and interest are not the​ only sums you​ have to​ pay .​
There are additional charges,​ too,​ and most of​ them are fees incurred during loan processing.
Annual Percentage Rate
The Annual Percentage Rate,​ or​ APR,​ is​ the​ total sum you​ have to​ pay .​
This includes mortgage interest rate and additional fees .​
When shopping around for mortgage quotes,​ pay attention to​ the​ APR .​
APR comparison will tell you​ which lender is​ offering you​ a​ more cost-efficient loan .​
Some lenders try to​ make their quotes more attractive by giving you​ low interest rates but require you​ to​ pay higher fees.
A typical contract contains clauses that mandate inspection of​ key areas of​ the​ house before the​ actual purchase .​
These clauses are called contingencies .​
Ask about contingencies while obtaining mortgage quotes.
Mortgage Lender Versus Mortgage Broker
To the​ uninitiated,​ it​ may seem ridiculous to​ have to​ choose between a​ mortgage lender and a​ mortgage broker .​
After all,​ the​ end result is​ the​ same .​
Those in​ the​ know,​ however,​ can tell you​ that a​ mortgage lender is​ not the​ same as​ a​ mortgage broker .​
a​ lender is​ an​ official at​ a​ lending institution who will lend you​ money for your house .​
a​ broker,​ on​ the​ other hand,​ is​ one who will shop around for you​ so you​ can have mortgage loan options to​ choose from .​
In the​ short run,​ it​ is​ easier to​ deal with a​ mortgage lender .​
In the​ long run,​ however,​ it​ might be better to​ deal with a​ mortgage broker because he may be able to​ provide you​ with better deals .​
The best thing you​ can do before taking out a​ mortgage is​ to​ compare mortgage quotes from both mortgage lenders and mortgage brokers.
It's important that you​ take your time to​ study all you​ can about the​ transaction and the​ market before signing anything .​
This way,​ you​ can make responsible and informed decisions.

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