The word mortgage may be a common household term, but taking the time to learn what a mortgage is and how to maintain one are important for those looking to buy a home. A mortgage is a type of loan that normally involves charging property to a creditor as security for a debt on the condition that the debt is paid back over a period of time. Most mortgages are financed through banks, but in 2014 nearly 40% of mortgage lenders were non-banks.
There are multiple loan types when it comes to your home loan, but fixed rate mortgages make up the vast majority of home mortgage lending transactions. These types of mortgages can be paid in installments for 10, 15, and 30 years, with the last option being the most common. If a person over 62 years of age is looking to purchase a home, they can choose to invest in what is known as a reverse mortgage. A reverse mortgage is a unique type of home loan that allows the lender to convert some of the equity in their home into money, which can then be paid back to the lender.
When searching for a home, your home loan is key. It is for that exact reason that mortgage brokers exist. They are here to help you through the process of selecting a home loan that is suited to your wants and needs. A mortgage broker can provide information about home loans, home equity, and a variety of other questions you may have about purchasing your home. Processing times for different types of loans may range from 30 to 90 days, and buyers generally need to make at least a 20% down payment before setting up a loan repayment plan. It can be difficult to find out what the best type of home loan is for you, but there are people who can help. Don’t wait to research your home loan, call a broker and discuss finances as soon as possible to assure the best possible plan for you!