Financing Your Home
Perhaps the most important aspect
of buying a home
is applying for a mortgage, hence financing.
A mortgage is defined as; a legal document between a lender and
borrower stipulating the terms of repayment for a specific property;
it essentially becomes a lien on the house.
The amount of money you will be
able to borrow for your home will depend on your income, interest
rates, amount of down payment and length of loan repayment. By
calculating you monthly costs (see Determining
Your Budget) you will know how much you will be able to afford
prior to applying for a mortgage.
It is possible to get pre-approved
for a mortgage, so that you may gear your home search according
to your pre-approved loan amount.
payments are a culmination of the entire amount borrowed, applicable
interest, and in some cases, property tax. Your main goal when
applying for a mortgage is to get the lowest interest
rate possible on your loan. There are many ways to lower you
mortgage interest rates, including; putting as much of
a down payment as is possible, shortening the amount
of time to repay the loan (amortization period), paying on a weekly
or bi-weekly schedule, as well as applying lump sum additional
payments. The terms of payment applied to your mortgage can usually
be changed on an annual basis, though again, this depends on whom
you borrow from.