Information about Mortgages

 

A mortgage is also sometimes known as a mortgage loan. It is an agreement between the borrower and the lender involving the buying or refinancing of a house without getting the cash upfront. This kind of mortgage allows the lender with the property rights of the buyer. The lender is allowed to repossess the collateral if the borrower is unable to repay the mortgage Wareham plus the interest at a given time. 

Difference between loan and mortgage

A mortgage is usually used to finance the property, mortgage is a type of loan but not every loan can be a mortgage. The difference between a normal loan and a mortgage is that it requires collateral. Mortgages are secured loans, the lender demands collateral for the money they will lend and the borrower will have to pay the amount back along with interest before the foreclosure. 

Mortgage Terminology

When you are shopping for a home and planning for a mortgage, you will come across a lot of industry lingo that you are not familiar with, this small, detailed blog will help you understand the terms and what it takes to apply for a mortgage. 

mortgages in wareham ma

Down Payment

The down payment is the most important part of purchasing a home. You have to put in a particular amount of money to get the mortgage. The size and the duration of the down payment depend on the type of loan you are taking. A larger down payment means better loan money and cheaper monthly payments.

The down payment is the money you pay upfront to purchase a home. In most cases, you have to put money down to get a mortgage. Making the down payment is also the most difficult part but if you have taken some consultation, you will do just fine. You can also use a mortgage calculator to check the payment amount that affects your monthly payment.

Interest Rate

An interest rate is a percentage that shows how much you’ll pay your lender each month as a fee for borrowing money. You will be charged with interest rates for two types of mortgage, the fixed rate, and the adjustable rates.

  • The fixed rates stay the same for the entire mortgage duration time. If you have taken a 30-year fixed-rate loan with a 4% interest rate, then the interest will stay the same all throughout the duration until you pay off your mortgage. Fixed rates often offer predictable payments every month making your budgeting process easy.
  • The adjustable rates are flexible to change depending on the market. Most of the adjustable-rate mortgages start with a fixed interest rate period, ranging from 5,7, or 10 years. The interest rates during this time will remain the same, and after the fixed interest rate period ends, the interest rates get settled for 6 months or a year, which means your monthly payment is changeable based on the interest payments.

These details will help you understand the mortgage Wareham properly when you are planning to apply for one. Connect with PCT Federal Credit Union at http://www.pctfcu.org/ or call 508-291-0777 to speak with experts.

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