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Helping first time home buyers with financing since 2002.
Mortgage Blog Categories:
Let’s take a look at millennials’ financial history
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How much should millennials plan to spend on a home?
What if you fail the 28% rule of thumb test?
What about if you don’t have enough for a down payment?
What else should millennial homebuyers know?
Best Apps for Remote Working
Remote Project Management Challenges and Solutions
Training Remote Employees
Best Remote Team Building Activities
What to consider when building an ADU
Financial Advice from Family and Friends is Free
Reality Check Your Dream House
Options for Making Your Dream Home a Reality
How a Mortgage Works
Understanding how a mortgage works can aid you in all your decisions when it comes to determining what type of financing will best satisfy your needs when buying a property. So follow along with me to learn the basics of how a mortgage works.
1. The Contract Defines the Terms
When it comes to financing a piece of real estate, the contract defines the terms of a loan. The contract is established so the lender can recover the property in case the terms of the contract aren’t met (otherwise known as foreclosure.) Eeeek! I hope this never happens to you – but if it does, I’m here to help you recover!
2. Payments for the Mortgage
The payments for the mortgage are divided between the principal, aka the amount that is borrowed, and the interest, which is what the lender charges you to borrow the money. So, say you take out a thirty-year fixed mortgage, then payments during the first twenty years will be made up of more interest than principal. Because the interest on a longer term loan spans over a greater period of time, it’s a good idea (if you can afford to do so) to choose a loan with shorter terms to save on the interest you’ll spend. Of course, your choice in a loan package will be contingent on how long you plan to live in the property and your future plans.
3. Learn more about loan packages
If you’re stll unclear about how a mortgage works, or you’re interested in learning more about how The Julie Aragon Lending Team can help you, please contact us or browse more posts to discover more. We have a variety of mortgage options. Let us help you realize your dream of home ownership starting today!