For First Time Homeowners
First time buyers usually have a hard time figuring out the many complicated aspects of getting a mortgage. This is where an Albuquerque Mortgage Broker can come in handy. Apart from introducing an interested party to the whole mortgage process, they can also define the often congruous and mind-boggling mortgage terms that are used by all mortgage lenders. In addition to this, a mortgage broker can help a first time homeowner fill out the application form, find out the credit score, find a reliable lender, choose the ideal and suitable mortgage type, find an array of houses to choose from and answer any questions that a first time buyer may have.
Buying that first home is a big deal. You have to go through so many procedures like finding that ideal Albuquerque Mortgage Broker and financial institution. Apart from this you need to make sure that the house you chose is the one. It is no good choosing a piece of property that you will get tired of after a year. After all, you will be paying quite a hefty amount of money for your house over the next few years. On the other hand, applying for that mortgage loan can give you security of having a permanent roof on your head. This time around, there is no need to fear cancelled leases, exorbitant rent payments and other tenant problems that you might have experienced. On top of all of this, a First time homeowner can also gain possible tax benefits, a chance to increase home equity and take a firm hold on your future.
Now that some of the First time homeowner basics have been discussed, it is time to get into the basics of a mortgage application. Among some of the most vital terms that need to be understood and remembered are interest rate, origination charge and loan term. The interest rate is the percentage that the lender will charge you in order for you to buy your home. There is no standard mortgage interest rate because this solely depends upon the market conditions, the credit score, the down-payment and the type of mortgage that is chosen. An origination charge, on the other hand, is the total cost that a First time buyer will pay the financial institution and the Albuquerque Mortgage Broker. Charges for the application, document preparation and underwriting are already included here. Lastly, the loan term refers to the time duration that will be spent paying the home loan. Short loan terms like a 5-year mortgage plan usually has higher monthly payments but the interest rates are way lower than that of a 30-year mortgage plan.
Mortgage payments consist of 4 major components. These are often referred to as PITI in Mortgage terms. PITI stands for Principal, Interest, Taxes and Insurance. The Principal refers to the amount of money that you borrowed form the lender to purchase your home. Interest is the interest rate that the lender has set up for you in lieu of the money that you borrowed. Taxes refer to the property taxes which are paid to the local government on frequent basis. Some brokers prefer to include the amount of taxes within an escrow account. This will ensure that the property taxes are paid in due time with little hassle on the side of the lender, the Albuquerque Mortgage Broker and the homeowner. While most home loans consist of these 4 components, there could be additional costs or hidden costs included. Hence, asking your preferred Albuquerque Mortgage Broker will be wise to ensure that you will not be paying more than is necessary. At the end of the day, your Mortgage broker is there to not only guide you through the process but also to help you obtain the most ideal mortgage package.