Mortgage. You hear this word a lot at banks and credit unions. It is a word that is closely related to the topic known as the housing market. In layman’s terms, mortgage can be defined as a home loan that is secured by real property. It is paid in installments over a certain amount of time. The mortgage that is agreed upon between the borrower and the mortgage lender is a legal pact. It secures the borrower’s promise to repay the money that is borrowed with interest.
First off, it is important to know that in order to qualify for a mortgage loan, the borrower must meet all of the pre-determined set of guidelines that is established by a lender. The mortgage lender must get their credit history, income details, employment, and assets. The property or home that the borrower would like to purchase must also meet certain standards set by the lender.
Next, the borrower must understand what is included in the mortgage loan. What are the components that make up the loan? Traditional mortgage loans are 15 or 30 years long and on a fixed rate. They consist of two main parts:
- Principle: This goes to paying the initial amount of money the borrower needs to buy the home.
- Interest: This is usually what the lending company charges for a loan. It is commonly seen that the amount paid in interest decreases each month, as the amount paying towards the principal increases.
The process of paying off the principal and interest over a period of time is known as amortization. An amortization schedule is usually given to the borrower to keep track of the schedule of payments that are required to pay off the loan. On top of the principle and the interest, the mortgage loan also consists of taxes and/or homeowners insurance. Furthermore, there are mortgage programs that can be helpful when applying for a mortgage. Depending on the down payment and monthly budget of a borrower, a mortgage program can set more flexible qualifying guidelines for a home loan. Some of the most popular mortgage programs borrowers look into include the FHA, Fannie Mae, Freddie Mac, and VA loans.
Ace Mortgage Loan Corporation is a mortgage company that has been providing Boca Raton, FL with quality mortgage services for the past 18 years. Since 1996, Ace Mortgage Loan Corporation has been teaching first time home buyers in Boca Raton, FL the basic concepts of what a mortgage entails. Their mortgage brokers have offered them financial advice on how to purchase, refinance, invest, and cash out on a new home. The people of Broward and Palm Beach Counties have been very pleased with Ace Mortgage Loan Corporation’s services and so will you. Call Ace Mortgage Loan Corporation today to get more details on how to get started on obtaining a Boca Raton mortgage.