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Basics Of Mortgage Loan

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Have a look at the presentation on mortgage loan, mortgage process and mortgage types.

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Basics Of Mortgage Loan

  1. 1. What is a mortgage loan?     A loan secured by real property such as land, home etc. This is used to make large real estate purchase. The borrower has to repay the loan over a period of time, along with the interest. Once the loan is paid off in full along with the interest, the borrower becomes the owner of the property.
  2. 2. Mortgage Loan Process    Pre-qualification Apply for a mortgage loan The processing of loan application  Home appraisal  Underwriting  Loan closing
  3. 3. Pre-qualification     This is the initial step in mortgage loan process. You supply information on your income, debts and assets to a lender. This can be done over phone or through internet. After reviewing your information, the lender gives you an idea of the mortgage amount that you can qualify.  Lender does not pull your credit report.  Getting pre-qualified does not ensure mortgage loan.
  4. 4. The Processing of Loan Application These documents are required for mortgage loan processing.  Last 2 pay check stubs  Last 2 W-2 forms  Last 2 bank statements  Other documents as may be required by the lender.
  5. 5. Loan Closing    This is the last step in getting a mortgage loan. You sign the loan contract. You have a number of closing fees.
  6. 6. Fixed Rate Mortgage    Interest rate remains fixed for the entire term of the loan. Monthly payment amount remains fixed for the entire term of the loan. Examples – 5-year fixed rate mortgage, 30-year fixed rate mortgage etc.
  7. 7. Adjustable Rate Mortgage      Rate of interest remains fixed for an initial period of time. Once that initial period is over, rate varies with some benchmark index. The benchmark index may be – LIBOR, COFI, US Treasury bond rate etc. The monthly payment remains fixed in the initial period. Thereafter, it varies. Examples–2/28, 3/27 adjustable rate mortgages. In 2/28 mortgage, the initial interest rate is fixed for a period of two years and then it varies for the remaining 28 years of the mortgage. Same intepretation holds for 3/27 adjustable rate mortgage.
  8. 8. MortgageFit For more information on mortgage Contact us at (800) 969-6348 Send mails at sam@mortgagefit.com Find us on:

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