A mortgage is a long term loan that uses real estate as collateral. Mortgage loans are usually fully amortizing which means that the monthly interest and principal payment will pay off the loan in the number of payments stipulated on the note. A mortgage loan where the down payment is less than 20% will probably require mortgage insurance. Most mortgage loans require monthly payments of principal and interest plus additional payments that are set aside in escrow accounts to pay property taxes, homeowners insurance, Home Owners Association fees and any Mortgage Insurance Premium payments. A conventional mortgage is one that is not insured or guaranteed by the Government. The Federal Housing Administration operates several low down payment mortgage insurance programs. Adjustable rate mortgages are available and should be discussed with your mortgage lender. There may be certain conditions with an adjustable rate loan that could result in additional costs to the buyer. Having the assistance of a quality Realtor, Lender and Attorney will make the buying process much smoother.
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