Introduction to mortgages

by | Oct 18, 2013 | Real Estate

Buying a house, especially if it is your first one is a big deal and unless you have all the money it takes to complete the purchase in cash, you will have to secure a mortgage. As your home and the mortgage you get to help pay for it are very important it stands to reason that you need to seek out a mortgage in New York that suits your finances best.

What is a mortgage? Let’s start with the basics, a mortgage is a loan, it is no different than any other loan, it requires repayment with interest over an agreed up length of time. The home that you are buying, whether brand new or pre-owned is owned by somebody, that somebody wants to convert their home to cash; they rarely will agree to finance it. They get the proceeds of the sale from your lender; you in turn pay the lender over time. Although the lender actually owns the home, you are allowed to take up occupancy as if you owned it. In the event of payment default, you can be evicted as the home is collateral that you sign over until the mortgage is completely satisfied.

What different types of mortgages are there? This is a very good question because lenders can be quite creative in determining the specifics of a mortgage. A typical Mortgage In New York is either a fixed interest rate mortgage or a variable interest rate mortgage. A fixed rate never changes during the term of the mortgage which is usually 20 years but can be 15 or 20 years. A variable rate mortgage is one where the rate of interest is reset annually. The mortgage that one selects is all based on their financial ability and the length of time they expect to keep the home.

Getting the best mortgage rate: There is more to consider when shopping for a mortgage than just the lowest rate of interest. You will constantly hear terms such as closing fees, APR, points, etc. The experts will be the first to suggest that the first low rate mortgage that you are offered may not end up being the best deal. There are many different fees that can be applied that have a significant effect on the cost of borrowing.

You can apply for a mortgage in New York with no fees in the event you are a member of a union. Contact Members Mortgage Corp. for details.

Latest Articles