Are you tired of paying huge amount of fees for home rents and you are therefore looking forward to having your own? If you are then this article is for you. This article is all about housing mortgage, what it is all about and how you can apply for them. And by the end of this article, you will have the basic knowledge on everything home mortgage and how to have complete freedom for debts.
ALSO READ: HOW MUCH MORTGAGE CAN I AFFORD
One of the most challenging factors of living in a developed city is the cost of renting for houses. This has led to so many persons moving from these so-called developed cities and towns to other places where the rentage rate is considerable. Before I go further into this article I would love to explain to you what a mortgage is and eventually what a home mortgage is.
A mortgage in the simplest of terms is that debt instrument that a borrower is obliged to pay back to a lender. A home mortgage, on the other hand, is a loan given by a financial institution or a bank for the purchase of a primary or investment residence.
How Does Home Mortgage Work
In this form of mortgage the borrower which s the owner of the property transfers the said title (owner) to the lender pending when the payment and other forms of their arrangement and agreement have been met. There are two types of interest rates in home mortgaging. Interest rates here can either be fixed, floating or adjustable rates. A home mortgage ranges from 10 to 30 years.
In a fixed mortgage type of rate, the periodic payment and the interest payment re generally the same each period. On the other hand, at an adjustable-rate, the interest and periodic payments are not the same. In other words, they vary. Interest rates in adjustable rates are relatively lower than fixed interest rates. This is because the borrower here bears all the risk of a future increase in interest rates if ever there should be one.
Benefits of a Home Mortgage
Well, the main aim of applying for a home mortgage is to be a proud homeowner independent of rents. As I have mentioned already in this article, this is one of the most common forms of loans. It is also one of the most advised. This is because, at the end of the day, you will end up with the property becoming yours. Home mortgages over the past few years have really helped a lot of persons. It now allows ordinary citizens who never thought of having their own homes see their dreams come true. You get to pay the entire sum of the house installmentally and not once.
How to Obtain a Home Mortgage
Obtaining a home mortgage is easy, although if you don’t know the processes you will need to be put through. The person who is interested in applying for this form of mortgage must first submit an application. He or she must also submit a financial history to the lender. This is done so that the borrower will show that he or she is capable of paying back the loan.
If you do not know how to apply for this type of mortgage you can look to secure the help of a mortgage broker. If after the lender and the borrower have agreed on the mortgage terms, collateral will then be put in place by the lender in the form of a lien. This lien simply means that if in the event that the borrower fails to meet up with payments, the lender may take possession of the house. This is also known as foreclosure.