Buying a home is one of the most important decisions in your life, regardless if it is your first time buying a home. There are many factors to consider such as price of home, location and what type of mortgage is right for you. It is important to examine your financial situation to determine what price range you want to look at and what mortgage program will fit your needs best. The Mortgage 1 professionals can help you with this proccess. Mortgage pre-approvals are a great way to start the process, apply now.
Finding a real estate agent that fits your needs is equally important. Mortgage 1 highly recommends that you choose a licensed agent who is an expert in the areas you are searching for a home.
Once you have found your dream home, find a Good Mortgage Lender who will work closely with your real estate professional to complete the process.
A pre-approved mortgage tells you exactly how much money the lender will let you borrow. A pre-approved mortgage occurs when a lender agrees to lend you a specified amount of money before you have found a home.
A conventional loan is a mortgage that is not guaranteed or insured by any government agency, including the Federal Housing Administration (FHA), the Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA). It is typically fixed in its terms and rate.
A conforming loan is any loan that meets the criteria and limits set forth by the two largest buyers of loans, Fannie Mae and Freddie Mac. In order to fully understand the difference, you first must know a little bit about Fannie Mae and Freddie Mac.
A jumbo loan is a loan with a loan amount larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Currently the limit is set at $417,000 for most areas. Special areas such as Alaska, Hawaii, Guam, and the U.S. Virgin Islands have a higher limit of $625,000. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate; usually .25% to .50% higher than that of a conforming loan.
A common type of mortgage loan is the fixed rate mortgage. With this loan, your payments and interest do not change for the term of the loan. Fixed rate mortgages come in different packages. The most common is the 30-year fixed. However, other terms are available.
An Adjustable Rate Mortgage, or ARM, is a mortgage where the interest rate is adjusted periodically based on an index. It is also known as the renegotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage.
A balloon mortgage is usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a specific time.