10 Key Factors To Know Before Applying For Mortgage

factors to know before applying for mortgage. First-time Homebuyers consulting a real estate broker.

(6) Types Of Loans & Rates

It is one of the best factors to know before applying for mortgage. There are mainly 3 types of loan depending on rate of interest: Fixed-Rate Mortgage (FRM) with same interest rate, Adjustable-Rate Mortgage (ARM) with changing interest rate and Interest Only-Jumbo Loan allows option of paying only interest for first few years.

Interest rate on your mortgage loan is dependent on number of factors such as current market conditions, state of the economy, as well as your credit profile.

Lenders may also charge for Points along with interest to cover their cost. You are advised to negotiate for them.

(7) Mortgage Insurance

It is one of the key factors to know before applying for mortgage or home equity loan. If you are making less than 20% down payment for your mortgage than you have to pay mortgage insurance to protect lenders in case of loan default.

Mortgage insurance premiums may vary depending on the credit score and size of down payment.

However, you can avoid this extra cost of mortgage insurance by just making higher down payment, paying a high rate of interest, or agreeing to a second mortgage.

Image Source: Shutterstock

Recommended Posts

More From GetUpWise

1 Comment on 10 Key Factors To Know Before Applying For Mortgage

  1. Zequek Estrada // August 26, 2016 at 11:58 PM // Reply

    I greatly appreciate that specific number ranges were used for what is considered creditworthy when getting a loan. It’s kind of common knowledge that high credit is good. I had just wondered the specifics of what exactly that meant.

Leave a comment

Your email address will not be published.


*


More in Real Estate & Mortgage
procedure involved in getting a mortgage.
Step-By-Step Procedure Involved In Getting A Mortgage

Mortgage can play a significant role in buying a dream home. This simple procedure involved in getting a mortgage can...

Close