A mortgage is a form of secured debt designed to buy a type of property. In the event that the borrower can not make payments, the lender has the right to foreclose on the property so as to recover losses.
There are many different types of mortgage with different terms.
It is recommended the borrower gets a mortgage that works well for their situation.
Steps on how to secure a mortgage
- Borrowers should have good credit with a minimum of 680 to comply with Fannie Mae and Freddie Mac guidelines
- Make sure credit reports are accurate
- Be proactive with organizing your digital documents: bank statements, tax returns and income statements
- Don’t consider just interest rates; consider points, closing costs and the type of loan program
- Shop around for loans and get quotes from three lending institutions and three mortgage brokers
- Respond quickly to lender requests
There are many different types of mortgages with different terms.
It is recommended the borrower finds the mortgage that works well for their situation.
Mortgage payments are often package with three items: the principal and interest, real estate taxes and homeowners insurance.