What is a mortgage loan?
A loan secured by real
property such as land,
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.
Mortgage Loan Process
Apply for a mortgage
The processing of loan
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
Lender does not pull your credit report.
Getting pre-qualified does not ensure mortgage loan.
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
This is the last step in
getting a mortgage
You sign the loan
You have a number of
Fixed Rate Mortgage
Interest rate remains fixed
for the entire term of the
Monthly payment amount
remains fixed for the entire
term of the loan.
Examples – 5-year fixed
rate mortgage, 30-year
fixed rate mortgage etc.
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.
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.
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