Home Loan Mortgage
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Home Loan Mortgage - Choose the best type of loan for you!
When you want to purchase a home, you have to apply for a home loan. Mortgage lending companies have different plans available, so you should first check to see if you can apply for any of these. Examples of such plans are the FHA loans and the VA loans. If you qualify for a federally guaranteed home loan, a mortgage company can offer you better repayment options and you may even be able to have 100% of the loan amount amortized without a down payment.
When applying for a home loan, mortgage interest rates vary according to the length of the term of your loan as well as your credit rating. If you have bad credit, some home loan mortgage companies will approve the loan, but you will be charged a higher rate of interest because you are a bad risk for repayment. With federally guaranteed mortgages, the lender is guaranteed to receive the payment should you default on the loan, so interest rates on these loans may be more competitive in cases of poor credit records.
When you decide to purchase a new home, you can get pre-approval for the home loan. Mortgage companies will tell you the amount of loan you can get, so in this way you know the price range of homes to look at. It also makes it easier to deal with a real estate company when the agent knows that you have the loan already in place. He/She knows that you are serious about making a purchase and not just wasting time looking.
The amount that you have to repay with a home loan is not just the principal amount that you borrowed. There are other costs involved in getting a home loan. Mortgage lenders add in the interest, plus the cost of the appraisal, the lawyer's fees and if you went through a mortgage broker, this fee is also added in. It is also possible to have an interest only mortgage in which you pay only the interest on the outstanding balance for a set period of time. This allows you the option of repaying a lot of the balance in combination with the interest or you can use the extra money saved to make improvements to the home. You can also use it to buy the furnishings you need.
Getting a home loan is not an overnight process. The approval may not take long, but for a home loan, the mortgage lender has to check out your credit record, verify the information on your application and also check out the home you wish to purchase. This is because a home loan mortgage company wants to make sure that it will actually be repaid the amount you borrowed.