The basics of Mortgage financing

2007-03-08 10:33:40

( Financial )



Mortgage financing is the process of taking out a loan to pay for the purchase of a real estate property. Mortgage financing comes with interest rates and specific payment periods wherein the mortgagor or borrower gives the mortgagee or lender a security on the property as loan collateral. As a borrower, your monthly mortgage financing payment goes toward the principal amount or total outstanding loan balance, the interest, taxes and insurance fees. The borrower's security on the property ends when the lender is paid off in full.

Before acquiring a mortgage, review all information available, make sure your personal finances are in order and discuss your plans with a mortgage financing specialist. Usually paid over a period of 10 to 25 years, mortgage financing is a complex process and involves a huge amount of time and money. Check rate movements and current interest rates by keeping track of key economic indicators and trends in the mortgage market. These figures normally predict the general direction of interest rates which give you a bigger chance of saving on interest rates.

That done, you are now ready to begin the process of acquiring a mortgage financing loan which involves the following steps:

1.Contact a mortgage financing specialist. The loan process begins as soon as you contact a mortgage specialist who will discuss your options and financial needs.
2.Complete an application. You need to disclose information such as your assets, income and information on past residences. Your mortgage specialist will also need copies of your income tax and bank statements.
3.Appraisal. When you have completed all the necessary paperwork, your mortgage specialist will verify your credit score through an international credit report. Your property will then be appraised to determine its value and a specialist will help you choose the proper mortgage product. How much money you make, your assets, credit rating and the kind of property you want to purchase are all important factors a lender considers when evaluating your mortgage financing application. Your loan form then goes to the underwriters for processing and approval, which generally takes a couple of day to about two weeks.
4.Closing. Once your mortgage financing loan gets approved, your documents get sent to the place where a closing ceremony is held. A closing is where the necessary paperwork is presented for the borrower to sign. Should you be unable to attend the closing, your lawyer or a mortgage professional can negotiate for the closing of the loan without your attendance.

The more educated and informed you are about mortgage financing process, the easier it will be to obtain a mortgage financing loan. But just like any other loan, be it a special finance auto loan,
finance car loans, student loan finance, car loan finance, loan finance calculator or construction loan financing, do some research and learn all the facts to make sure you get the best deal.


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