What Buyers Need to Know About Home Mortgages

What Buyers Need to Know About Home Mortgages

Whether you’re considering buying real estate in Rockport TX or anywhere in the nation, it’s likely you’ll need a mortgage. Mortgages are a part of a lending system that allows owner to pay a down payment on a home and repay the remaining balance—plus interest—to a lender. The home itself is collateral and can be repossessed by lenders if buyers fail to meet contractual obligations.

How to Obtain a Home Loan

You’ll want to have a pre-approval letter from a lender before looking at homes or even hiring a realtor. To qualify, you’ll need to meet salary and credit requirements to each lender’s qualifications. To ensure the best interest rates and mortgage options:

  • Pay of loans and debts to less than 12% of expendable income and balances
  • Build up your credit score
  • Know how much home you can afford, typically about 3 times household annual income
  • Save up a substantial down payment (15-20%)
  • Put away money for closing costs, additional inspections and immediate repairs

Types of Mortgages

Conventional mortgages are typically designed for either a 15 or 30 year repayment structure and are either fixed interest or variable rate interest loans. There are also government-guaranteed loans that veterans, low-income families, first time buyers and those moving to rural communities may qualify for. Many of the programs lower interest and down payment requirements in addition to other benefits.

Categories: Real Estate

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