Home loans and mortgages will always appear as something of a daunting, uncharted planet when it comes to new homeowners. What do all these terms mean, and how do they apply to me? When exactly to I have to start paying money back? What things to I have to look out for, and how do I know when I’m not getting taken for a ride? All of these questions will occur to the prospective homeowner when it comes to applying for his or her first mortgage. With this Mortgages infographic, we at LoansMag run slowly through the fundamentals, so that you can take it all in without having to consult any dusty financial textbooks!
The first thing you will find in this infographic is a definition of the two main types of mortgage: fixed-rate and variable-rate. Knowing these two is really the first step when it comes to applying for a loan, and can make all the difference. A fixed-rate mortgage involves an interest rate that remains frozen for the length of the loan, whereas a variable-rate mortgage has a rate that will go up and down depending on a financial index.
We then run through the basic steps you should take when securing your first mortgage. These include the setting of a budget, which is of the utmost importance in that it ensures you will not be borrowing money that you cannot afford to pay back. Evaluating your credit report is also important, in that your credit rating will make the difference between a good rate and a bad one. Getting pre-approval is another important step, but so is shopping around so as to find the best deal for you. Don’t be afraid to do so, even if you’ve been approved.
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