Understanding How Mortgages Work
Not many people have the luxury to buy their preferred homes out of pocket, at full cost. A gainfully employed individual who may have gotten tired of renting usually have other concerns to think of like daily living expenses, children’s education, and health insurance, among others. Those who actually have the money to pay outright such as investors, may consider doing otherwise as a wiser financial move. Fortunately, there are other options available to attain home ownership. One of which is mortgage.
Photo by Tierra Mallorca on Unsplash
Mortgage is essentially a secured loan wherein the borrower agrees to pay the mortgage lender the sum borrowed plus interest over an agreed period. The property bought serves as the collateral which gives the lender the right to sell or foreclose it to recoup losses from the unpaid loan. While it is a sound means to buy a home, it is a serious responsibility which can affect credit scores if not used prudently.
How Mortgages Work
As already mentioned, getting a mortgage can be a means to the goal of owning a home. Here is how it works:
- Before even looking for a home to purchase, have yourself pre-approved by a mortgage lender. By going through this step, you will get a clear idea on how much loan you can qualify for. It doesn’t make sense to look at properties which are beyond your expected approval amount.
- Get in touch with a real estate agent to find properties that may be of interest to you based on price, location, style, and size. In this way, you don’t have to waste time on properties that are not realistically within your personal preference and financial capacity.
- Initiate process of mortgage application and be prepared to provide documentary requirements to obtain the loan. Take note that the lender will be qualifying you based on their standards as to ability to pay.
- Close the loan with the mortgage lender and real estate agent . At this time, you are expected to provide the down payment and sign mortgage papers.
- Finish payment of the loan according to agreed term which can range from 15 to 30 years. Remember that the lender holds a lien on the property until full payment is made.
Guided by these information, you will be able to avoid unnecessary stress when you do decide to take out a mortgage. In fact, informative sites such as MortgageCalculator.org offers online games to enjoy aside from useful data and calculation assistance for your loan plans. The games offer a respite from the daily concerns as you work on your goals. After all, minds and bodies need rest after putting in a hard day’s work. I found these to be pleasantly satisfying.
Supermarket Numbers
This is an arithmetic practice game. It is not too easy to be boring nor too hard to be frustrating. Ideal for those who have free time on their hands, it certainly pushes you to go the next level.
Magnificent Tower
This is a simple tower building game where players lay one floor at a time until they can no longer lay down any additional layers. The challenge is to build the tallest skyscraper. Playing allows you to imagine how you want your own home built.
My Say
Sone people see taking out a loan as a bad thing. It shouldn’t be, especially if it will allow you to accomplish life goals but it needs to be handled with the right information. The main thing is to understand how mortgage can work for you. It wouldn’t hurt to have fun as well as we try realize our dreams for a better life.
