If you’re thinking about buying a home, you’re likely to need a mortgage. But what is a mortgage? This blog discusses what a mortgage is, how it works, and where to find an experienced mortgage broker near you.
What is a Mortgage?
A mortgage is a loan from a lender, like a bank or credit union, to buy a home or real estate property. The borrower then pays back the loan, with interest and principal, through a series of repayments over a period of time.
How does a mortgage work?
A mortgage loan is probably the most significant loan you can get in your life. Since it is a major commitment, you will want to ensure you understand the jargon used when getting a mortgage.
1. Principal. The principal is the amount you borrowed. The principal amount decreases over time as you repay the loan each month.
2. Interest. When you make mortgage payments, you’re not just paying down the principal amount but also paying interest. An interest rate can either be adjustable or fixed based on what type of mortgage you have.
3. Taxes. When you own real estate, you have to pay property taxes. Property taxes depend on each state, city, and county.
4. Insurance. The mortgage contract will require you to have homeowners’ insurance on the property. The insurance protects your property against fire, theft, or accidents.
How mortgage brokers can help you secure a home loan
Purchasing real estate is a big decision. Before taking out a mortgage loan, educate yourself about the market, the requirements, and the overall home buying procedure to know what to expect.
The more you understand how a mortgage works, the more equipped you are to choose the suitable mortgage that is best for you!
At Belay Mortgage Group, we are the most experienced mortgage advisors in Vancouver, WA. We also serve in California, Oregon, and Washington State.
If you need more information about mortgages or need advice about mortgages, consider contacting a HUD-approved housing counselor, a mortgage advisor, or a real estate attorney.