Things You Need to Know before Getting a Mortgage
Everyone dreams of owning the house they wish to live in for the rest of their lives. Some people may have already found it, and are now considering getting a mortgage loan in order to pursue this objective of getting the home of their dreams. If you are one of them, then it is important that you check out the top things you need to know before venturing into a mortgage. Amongst the most important, is aquiring mortgage life insurance. This protects your family in case of your death.
There is more than one way of acquiring that house. The bank home equity loan allows you to go to financial institutions to provide the money you wish to borrow by having your current house as collateral. This means you serve up your present residence to them in writing as corresponding asset or property while the bank lends you money equivalent to your credit line. Your credit line is then calculated based on the plan that they offer, the appraised value of your current home, and the annual percentage rate applied by these lending institutions. Before you open up a plan however, you should verify a few things first.
Are you truly decided to get a mortgage loan? If you are then you must have no qualms about pursuing that mortgage, so go ahead and talk to an agent to discuss the deal and finalize your wish to open a plan with on a mortgage. But if you having second thoughts or is still undecided, you may need to take some time to think it over. However, once a plan has been opened with the banking institution, you are given by law at least three days to cancel the account in case you change your mind about getting that mortgage. Once that happens and you actually prefer to cancel the plan, the lending institution will then yield over back to you the money you paid for initial fees, including application and consultation fees.
Having a plan that can support your payment terms for the mortgage is also imperative. You should take a look at the various plans offered by the bank before deciding on accepting which plan. Make sure that your capability to pay off debt on the duration of the period of your plan will be supported by your current financial means. Usually the bank checks on your credit history report, such as current debts, annual income, and the like before they agree to taking you on to a mortgage plan.
Remember that the principal that you owe does not necessarily follow through the time period of the plan as the annual percentage rates or APRs are not fixed throughout the duration of the plan; it is usually dependent on a published rate followed by most of the other financial institutions. Regardless of the fact that there is a maximum percentage that your interest rates may increase as it is required by law. In some instances, other lending institutions follow a low fixed rate for a certain period of time, like during the first few months of your mortgage. Others may revert interest rates, from following a changing rate based on the published public index to a fixed one during the course of the mortgage plan.
Your terms of payment as per the agreement you have with your bank agent should be able to secure the issue of how to pay your mortgage loan. A certain premium is given to those who pay in advance, but this does not necessarily occur most of the time. Usually what happens is a monthly or quarterly set of payments are required by the lender such as a set amount of the actual money borrowed and the added interest rates based on the percentage applied by the banks during the period of payment. This makes it easier for you to provide payment, and does not endanger you of losing your home.
If you are in dire need of reassurance, then you can engage into a second mortgage to pay off your first mortgage, and this time, be thoroughly involved to ensure better deals like lower fixed interest rates and longer payment terms. Be vigilant in checking the amounts printed on the agreement - check the principal money owed and interest rates if it is as per your discussion with the bank agent, and confirm how much you are expected to return along with the added interest in every payment interval.
You can also get a reverse mortgage, where there is a list of convenient payment terms since this is based on the actual amount of a fixed part of your home equity that you can borrow. The older you are, the higher your home appraisal is, and the fact that your reverse mortgage when calculated can be equivalent to the remaining balance on your current or first bank home loan, then the bigger the amount you can borrow.
Always consider these things before getting into a mortgage. Once you have ensured that you have followed the checklist - from getting a mortgage plan to payment terms - and is indeed strongly willed towards acquiring that loan, then go ahead and proceed with your mortgage.