Mortgage

Mortgage - A lien on the property that secures the Promise to repay a loan.

How much cash will I need to purchase a home - The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:

Earnest Money: The deposit that is supplied when you make an offer on the house

Down Payment: A percentage of the cost of the home that is due at settlement

Closing Costs: Costs associated with processing paperwork to purchase or refinance a house

If you are in a situation where you would rather save your money then lock it into a home, there is always the possibility of asking for a seller concession and try to get approved for 100% mortgage financing.

While this it is possible in today's lending climate to buy a home with literally no money down, it behooves the borrower to at least expect and prepare for some minimal expenses. Look at it this way, if you can buy a home for as little as first and last months deposit for a rental home, you are way ahead.

In some cases it is even possible to purchase a home with only slightest, or in some instances, even no earnest money deposit. Combined with seller concessions and/or no closing cost loans, it is possible to get into a home with actually no out of pocket expenses.

You must be prepared to come up with the closing costs plus 1 years worth of homeowners insurance upfront, pay for any application fees, appraisal fees and inspection fees.

Loan term - The loan term (also called Amortization) is the length of time before the loan is due to be repaid in full. Most common mortgage loans have 15 or 30-year terms.

As a rule of thumb, the long the loan term the higher the interest rate, and vice versa. On average, banks charge 0.5% higher in interest rate on a 30-year fixed rate mortgage than on a 15-year mortgage. Also, eventhough the monthly payment of a 30 year loan is much lower than that of a 15 year mortgage, a homeowner with a 30 year mortgage would pay much more in interest over the life of the loan.

A Listing agents or listing realtor works for the seller that has the property listed for sale. Although they can right contracts for buyers that have chosen not to have an agent of there own they are obligated only to have the best interest of the seller in the transaction.

Paying a little extra towards your mortgage payment every month will serve to significantly shorten the term of your loan.

A new loan tern that is becoming popular is the 40 yr term. This has become more popular because i allows you to lower your payments because the loan is spread out over a longer term.

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