How Much Can You Afford?
After you decide to start looking for a home with a REALTOR®, you will need to determine how much you can afford to spend. Meeting with a mortgage lender will get you on the right track. A lender will ask you questions about your income and expenses, tell you about different loans that you may qualify for and give you an idea of how much he or she can lend you. This section will give you basic information about mortgages, becoming pre-qualified and general expenses.
What is a mortgage?
A mortgage is a loan obtained to purchase real estate. The mortgage is a lien (a legal claim) on the home or property that secures your promise to pay the debt. If you do not pay your mortgage payments, the bank can take your house from you through foreclosure and resell the house in order to pay off the loan.
Why do you need a mortgage?
Most people do not have enough money to buy a house without a mortgage loan. A home is a large purchase, probably the biggest one you’ll ever make. Lenders help families by allowing them to borrow the money to buy a home. The borrower must repay the lender the original amount borrowed for the mortgage and any interest that accrues.
Who makes a mortgage loan?
There are many places you can go to get a home loan, so you need to find the one that fits you the best. Talk to the lender. Make sure the lender understands your needs and is willing to meet them. You can visit the following places to learn about mortgages: banks, mortgage companies, credit unions, non-profit community housing organizations and mortgage brokers. To read more about the different types of lenders, click here.
How do you find the right lender?
Not all lenders offer the same services. It is important that you find the lender who will best work with you. There are many places to look for lenders, but the best way is by asking your friends and family about their mortgage lender. If they liked the lender and received quality service, consider meeting that lender. You can also check with your bank or credit union. You can read more about finding the right lender by clicking here. The Mid-South Better Business Bureau also has information about reputable lenders.
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