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PostHeaderIcon House Loan & House Mortgage

A house loan is what a client borrows to purchase a home. The loan that a borrower gets from a bank or mortgage company is called a mortgage, or a note. The bank or mortgage that is giving the loan is called the lender. To pay back the lender you will have a monthly payment which is called the mortgage statement or payment. On this monthly payment the lender has an interest rate attached. There are to common types of loan conventional and FHA. The most common terms for these are fifteen years and thirty years. A fifteen year benefits are paying off the mortgage in half the time of a thirty, and also saving a lot on the interest. The benefits of a thirty year mortgage are it’s easier to qualify for, lower monthly payments. A home loan is probably the biggest investment a client will have.

The basic mortgage information about a mortgage is that it’s a lien on a property that was taken by a loan and that is paid back to the lender in monthly installments over a set term. A mortgage loan is taken out by a buyer to pay off the seller for a home in full. Then the borrower who took the loan from a lender owes it back in full plus interest. For the promise that the borrower will pay back the lender, the lender has a deed that they still own the property, until the mortgage loan is paid off. While the borrower pays back the loan, they live in the home as if they already own it. There are many types of mortgage loans, the one that best fits each client need to look at their financial standings and how long they tend to stay in the home. Some clients plan to stay in the home for thirty years or more and some clients decide to make an investment or want to pay their loan off quickly. To know which mortgage loan best fits the client it takes time and effort. Once a borrower has a mortgage they are eligible to refinance the loan. This means that the borrower can renegotiate the term and the interest rate. Refinancing is taking the old secured loan and paying it off with a new secured loan. A borrower typically refinances either to lower the monthly payments by getting a new interest rate or changing the term of their loan. A mortgage is the most likely the largest payment a client has each month so when the interest rates drop and are lower than their current rate a client can benefit greatly.

The house mortgage is the loan that a borrower took from a lender with interest. To obtain a mortgage you can talk over the phone or in person to a bank or mortgage company and take application, which can be “ran” to see if the lender will approve the loan. The information that is taken during an application is basic, until income information is needed and also the social security number. This can help determine if you can afford the loan.  Once this part is done, the lender will have a certified appraiser come out and have a appraisal done to the property to see if the value is there. Meaning that the home still has value is worth more than it was bought for. This is known as the LTV or loan to value; how much the borrower is financing against the total value of the home. Also the DTI ratio are a major factor, there are to ratio the front and back. The front ratio is percentage of income that goes toward the home and the back ratio is the percentage that goes to paying all reoccurring debt. These are some of the factors that go into obtaining a loan, the best way to see if you can get a loan or refinance the current one is by contacting the bank you have your loan from or a mortgage company.

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