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More Mortgage Tips
by Apu Hypallathek, Use Mortgage
For many, the American dream begins and ends with the purchase of their very first home. But, unless your name is "Trump" or "Gates," you will most likely not be able to put down all the money required to purchase your first home. So, you will need to get a home loan - or mortgage - in order to move into your dream home. But getting a home mortgage can be a daunting task.
Getting a home loan involves signing an agreement with a bank or lender to pay them a certain amount of interest on a specified amount of money that they will lend to you so that you can purchase residential property. The home loans are then secured against the residential property which they are used to purchase.
You may be familiar with personal loans or the interest charged on your credit cards. The good news is that home mortgages generally offer a lower interest rate than credit cards or personal loans because of the longer period of time over which you will pay the off the loan and the interest. Your loan payments will usually be monthly, and the repayment terms could be anywhere from 10 to 30 years.
For the most part, there are two
main types of home mortgages, with a third sub-type
gaining some popularity over the past few years. The
first type of home mortgage
A variable-rate mortgage is where
the interest rate of the loan changes over the course of
the mortgage term. The variable rate mortgage is usually
tied to the prime rate of lending available to banks and
set by the Federal Reserve Bank in Washington, D.C. When
the prime rate is lowered, there is a good chance you
will save money with a variable interest rate loan. But,
when the rates go up, the cost
A third type of loan which is becoming more popular in America is the bad credit loan, known as the "low doc" loan. Low doc home mortgages are usually more expensive than traditional home mortgages, with higher fees and interest rates, but this is to offset the additional risk that the lenders must assume when lending money to people with poor credit. But, these low doc loans may be the only way that people with poor credit, no credit history, low incomes, or self-employed people can get a home mortgage.
But, no matter what type of credit you have, there is most likely a home mortgage that is available to you. So keep trying and get into your dream home now!
Apu Hypallathek is the owner and webmaster of Use Mortgage, a leading Internet portal for mortgage information. For more mortgage information and resources, please stop by www.usemortgage.com.
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