Illinois mortgage
Ever wonder, what lenders look for in determining whether one qualify for a mortgage The four c's of "credit-worthiness"from the eyes of a mortgage broker is very important; ones credit, collateral,and character.
Credit Rating: credit is an essential first step in ones buying process. One should be honest with onesloan officer if one has had any credit problems. There are many legitimatereasons why persons may have encountered a credit problem. If one dealt with ones credit problem and have maintained a satisfactory record for a minimum of one year, one will most likely qualify to most mortgage professionals. Mostpeople will have a credit history. This history plus ones income will determineones credit-worthiness.
Collateral: the real value of theproperty that one is buying is what constitutes collateral. If one fails tomake ones mortgage payments, the lender will seize ones property and sell. Anappraisal will ensure that the home is not worth less than one paid for it and therefore the lender would not incur a loss should one not be able to make onesmortgage payments.
Character: the subjectivedetermination of ones over-all financial situation formed by ones jobstability, continued employment and ones proven credit history is what iscalled "character", another determining factor used to grant or tonot grant a loan.
Reasons for a Pre-Approved Mortgage:
Being pre-approved gives one thepower to know ones financial limitations and removes the stress of finding theperfect home only to worry as to whether one will qualify for the mortgage. Apre-approved buyer has almost as much power as cash buyers. A Pre-Approval Certificate gives the seller a GUARANTEE that one will get the loan, and therefore ones offer is responded to immediately.
Types of Mortgages:
There are three different typesof mortgages. They are fixed rate mortgages, adjustable rate mortgages andballoon mortgages. The most common mortgage is the "fixed ratemortgage".
Fixed Rate Mortgages: this is themost popular type of mortgage. A fixed term as well as a fixed interest rateexists from the start of the mortgage. The monthly amount for the payment ofthe principal and interest will not change during the term of the mortgage.This gives the homebuyer a lot of stability when managing ones finances.
Adjustable Rate Mortgages: theinterest rate on ones mortgage will be adjusted up or down according to currentinterest rate levels. The monthly amount for ones principal and interestpayment will go up or down with these rate changes. Mortgage types can beadjusted through the years.
Balloon Mortgages: a"balloon" mortgage is similar to a fixed rate loan in that paymentsare made in equal installments over the duration of the loan. They differ inthat the loan is not fully amortized over the term.
Choosing a mortgage is a big andimportant, personal decision.Anddecision can be easy if one knows ones current finance, debts and onesprojected income for the years ahead.
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