Consider a Mortgage Pre-Approval

You've spent a lot of time imagining your dream home. Now imagine this: You've found the perfect neighborhood, the cutest little house with the greatest backyard, and you think you can even afford it. It has everything you ever wanted. You've spent a couple hundred hours finding your little treasure, you've spent a couple hundred dollars on fees and property inspections, and you have scrunched up your courage to make an offer. Your heart is so set on it that you've even started telling your friends your new address. (more)

The Anatomy of a Mortgage

What exactly is a mortgage? Simply put, it's a loan from a financial institution to you. In return, you pay interest on the amount loaned. The lender also has first dibs on your house in case you neglect to pay back the loan.

Francophiles and wordsmiths will recognize the root word "mort" in there. No, that's not your Uncle Mort; that's the French word for "dead." The idea is that you're going to kill off that loan, by paying back the money you borrowed. You amortize the loan, over time. Yes, it's a slow death, but it must be carried out.

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Coming up with down payments getting easier

Down payments a major hurdle to homeownership?

Not any more.

These days, it's downright easy to overcome what experts have long dubbed the "biggest obstacle" to buying. Lenders have dramatically eased their down payment requirements while allowing more types of government assistance, grants and gifts to be used in place of a borrower's own money. As a result, even customers with little or no spare change shouldn't be afraid to talk to a lender and see if they can take advantage of today's low rates to buy.

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15-year vs. 30-year mortgages

Before choosing a lender, fighting over closing costs and arguing with the home seller about whether the air conditioner needs charging, mortgage shoppers ask themselves a seemingly simple question: 15 years or 30?

But the decision between a 15-year mortgage and a 30-year mortgage isn't always simple. The 30-year mortgage has lower monthly payments, yet ultimately costs more; the 15-year mortgage mortgage requires higher monthly payments, but builds equity faster.

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What is a mortgage?

A mortgage is a long-term loan that a borrower obtains from a bank, thrift, independent mortgage broker, online lender or even the property seller. The house and the land it sits on serve as collateral for the loan. The borrower signs documents at closing time giving the lender a lien against the property. If that borrower doesn't make payments as agreed, the lender can take the home through foreclosure.

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Do's and don't for getting a mortgage.

 

Here's the good news: More people than ever can buy a home.

Now for the bad: It's going to take a lot of patience, restraint and some careful planning to get there. That loan officer sitting across the table won't look kindly on the new Lexus you bought or the stack of credit card bills on the kitchen counter. And if you've only managed to put away $1,000 in savings by then, it'll be time to forget about the $300,000 beach house.

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