MORTGAGE

 

Mortgage – is a legal agreement by which a bank, insurance company, building society lends money at interest in exchange for taking title of debtor’s property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Mortgage – is an agreement between you and the lender, in these agreement the lender has the right to take your property if you fail to repay the loan you have borrowed plus the interests.

NOTE: Mortgage loan are used to buy homes or to borrow money against the value of a home want to own.

Things to look for in a mortgage

1. The size of the loan

2. The interest rates and any associated costs

3. The closing costs of the loan including the lender’s fees

4. The Annual Percentage Rate (APR)

5. The type of interest rate and whether it can change or is it fixed or adjustable?

6. The loan term or how long you will have to repay the loan

7. Whether the loan has other risk features, such as a pre-payment penalty.

NOTE: Focus on a mortgage that is affordable for you, and not how much you qualify for. Before taking the mortgage do your research on title, if there is any court order with the previous owner, are there any pending land rates.

What to focus on before taking the Mortgage loan?

Lenders will tell you how much they can give you in terms of loan or how much have you qualified to borrow but that is what they are willing to lend you. But how much you can borrow is different from how much you can afford to repay without stretching your budget. Lenders do not take into account all your financial circumstances. To know how much, you can afford to repay the loan you need to take a hard look at your family’s income, expenses and saving priorities to see what fits comfortably within your budget.

Costs such as homeowner’s insurance, private mortgage insurance and property taxes are typically added to your monthly mortgage payment, so be sure to include these costs when calculating how much you can afford. You can get assistance from your local assessor, insurance agent and lender. Knowing how much you can comfortably pay each month will also help you estimate a reasonable price range for your new home.

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