The biggest purchase most people will ever make in their lifetime is a home. Our goal is to help you find a mortgage that’s right for you with the help of our team here at Efinancequotes.com. With our secure, reliable network of lenders and brokers, we help you find the best mortgage by putting homebuyers in touch with lenders in your area, who can help you find a mortgage to suit your needs. We have a variety of online resources that can give you the ability to expand your search and tap into a broader lender base who are looking to help you finance your new home. When a consumer trying to find a mortgage rate submits an online form on Efinancequote.com, we match them with lenders like you that can provide them with the services they need.
What is a Mortgage?
A mortgage is a type of a loan in which a bank or mortgage lender provides to homebuyers to help finance the purchase of a residential property. While there are lenders that may be able to lend you 100% of the value of the home it is most advantageous to borrow between 70-80% of the value of the home or less. The property you buy is the collateral in exchange for the money you are borrow to finance the mortgage of that house. Most mortgage payments are made up of four parts: principal, interest, taxes and insurance. It’s typically paid on a monthly basis. There are also plans where you can pay bi-monthly. As you can imagine this would reduce the interest you pay on your mortgage dramatically.
Principal is the total amount of money you borrowed to buy the house (e.g., If you have a $300,000 mortgage loan, the beginning principal balance is $300,000).
Interest is the percentage rate or amount that you pay to borrow money from your lender. Interest is usually deducted from your taxes when you file your income tax returns.
Taxes are the property taxes you pay as a homeowner to the county you live in. They’re usually calculated based upon the value of your houses’ land and building.
Mortgage insurance includes homeowners insurance and could include private mortgage insurance (PMI). You are typically required to get homeowners insurance by your lender to cover your house and possibly the property inside. Typically for conventional loans, if your down payment is less than 20%, you will have to pay private mortgage insurance which protects the lender if you default on your mortgage loan. PMI rates range from .05% to 1%.
When you get a mortgage you will need to hire a title loan company or an attorney who handles such transactions. At the closing you will sign legal documents known as a mortgage note that promise you will repay the balance of your mortgage to the lender, with interest and other possible costs over a set period of time. Should you default on your mortgage payments, the lender is allowed to take back your home and sell it. The process in which a lender engages in taking the property away from a homeowner who defaulted on a mortgage is a legal process known as a foreclosure.
A mortgage loan, also referred to as a mortgage, is used by purchasers of real property to raise funds to buy real estate; by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged. The loan is “secured” on the borrower’s property. This means that a legal mechanism is put in place which allows the lender to take possession and sell the secured property (“foreclosure” or “repossession”) to pay off the loan in the event that the borrower defaults on the loan or otherwise fails to abide by its terms. The word mortgage is derived from a “Law French” term used by English lawyers in the Middle Ages meaning “death pledge”, and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure. Mortgage can also be described as “a borrower giving consideration in the form of a collateral for a benefit (loan).
Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging commercial property (for example, their own business premises, residential property let to tenants or an investment portfolio). The lender will typically be a financial institution, such as a bank, credit union or building society, depending on the country concerned, and the loan arrangements can be made either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably. The lender’s rights over the secured property take priority over the borrower’s other creditors which means that if the borrower becomes bankrupt or insolvent, the other creditors will only be repaid the debts owed to them from a sale of the secured property if the mortgage lender is repaid in full first.