is a mortgage loan when you already own a home and you'll be using your home as collateral for a personal loan? Because my husband and I are wanting to buy our first home, so is what we need to apply for called a mortgage loan?
2007-07-12 07:50:18 · 15 answers · asked by newmommie 1 in Business & Finance ➔ Renting & Real Estate
you better do your homework before signing those documents. A mortgage is the loan that you get when buying a house. You sign the mortgage over to the lending bank, so if you are late in making your payment, they get to take possession of your home, kick you out, and try and sell it to recoup the amount still outstanding on the loan.
2007-07-12 07:55:40 · answer #1 · answered by redwine 6 · 0⤊ 0⤋
A purchase mortgage is what you'll be needing. You don't presently own a home, and when you find one that you like a bank, finance co, (whatever) will loan the $ to you and secure their interest by puting a mortgage against the house. If you build up substantial equity and decide to take this add'l money out of the home, this could be done via a 2nd mortgage, sometimes called a home-equity loan (same thing) It's a 2nd mortgage because it's position in case of a default is junior to the 1st / primary mortgage.
2007-07-12 08:00:09 · answer #2 · answered by Donald C 2 · 0⤊ 0⤋
Yes.
It is a loan against the property you are GOING to purchase.
The number 1 thing you should do is visit a lender who you trust.
If you have a large down payment & great credit, go to your bank. They can give you great rates & will cover the loan if their investor backs out.
If you have little $ down and/or "so so" credit, visit a "mortgage broker". They have access to many more investors and programs that banks can't use, however, if the investor in your loan backs out before closing, the broker will not have the $ to cover the loan & the deal may fall through due to financing.
Here are some items to take your lender:
Most recent paycheck stub with at least 30 days of year to date information
Previous year's W-2s
Info on previous employment (if at current job less than 2 years)
Most recent bank statements for all checking, savings, & time deposit accounts
Current brokerage statements for all investment accounts
funds to cover the cost of a credit report (should not more than $25 bucks)
Good luck & congrats on the purchase of your 1st home!
2007-07-12 08:00:39 · answer #3 · answered by Anonymous · 0⤊ 0⤋
First of all and being a former real estate educator I can assure you there are no stupid questions in this business.
Here is an overlysimplified explanation
When you get ready to buy a house you go to the lender who approved you and they will have you sign a promissory note and a mortgage.
The promissory note is the instrument showing what the debt is between you and the lender and what the terms of pay back and terms and conditions in the event of default are.
The mortgage is the instrument that the borrower gives to the lender giving the lender, as collateral, the property, along with the right of the lender to ask the court to sell the property in the event of a default on the promissory note.
Hope it helps, good luck
2007-07-12 08:22:03 · answer #4 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋
Yes. A mortgage (also referred to as a "home loan")represents a loan or lien on a property/house that has to be paid over a specified period of time. If you don't have enough money to pay cash for a home (and most of us don't :-) ), you ask a bank or lending institution (mortgage broker, credit union, etc.) to loan you the money, with your house as collateral.
When a bank decides to make a loan on a house, they evaluate different risk factors: One, they take into account the property (is it something they can sell if they have to foreclose? If not, it increases their risk.) Two, they take into account your ability to pay (your income and assets), and three, they take into account your willingness to pay (as evidenced by your credit report.)
If you are shopping for a home, many banks will evaluate your income and debts and give you what is called an "pre-approval" -- which tells a seller that you have talked to a bank, the bank has evaluated your income and debts, and the bank is now willing to loan you "X" amount of money, DEPENDING ON THE PROPERTY. That makes the seller more likely to accept your offer on a property, because you are a "sure thing", instead of someone else whose credit may be iffy. It also gives you a very clear idea of how much you can afford to spend for a house, and keep you from wasting time looking at houses that you can't qualify for. (For example, on some high-end, multi-million dollar houses, an agent won't even SHOW you a house unless you can produce evidence that you are able to purchase it! Why waste their time showing it to people who can't buy?)
2007-07-12 08:10:55 · answer #5 · answered by Anonymous · 0⤊ 0⤋
simple answer.... a mortgage loan is a loan that is secured by a piece of real property (land and/or buildings). The mortgage is the document that grants the lender the right to take possession of the property if there is a default on the loan before its paid off (foreclosure).
2007-07-12 08:17:33 · answer #6 · answered by therainbowseeker 4 · 0⤊ 0⤋
You need a mortgage loan. Go to any bank and ask for the mortgage department.
It sounds like you might not be quite up to speed on financial terminology, etc. In that case, I suggest you do not use an online mortgage lender or a mortgage broker. Go to your bank or another reputable bank in your area.
2007-07-12 07:56:17 · answer #7 · answered by ? 5 · 0⤊ 0⤋
If you are buying a home and are applying for a loan, that is a mortgage loan. If you have a home and want to use your equity to borrow money or lower your payments, that is refinancing.
2007-07-12 07:54:58 · answer #8 · answered by Kathy D 1 · 0⤊ 0⤋
A mortgage loan is a loan on a house or property. It can be a house you live in or property you own for investment.
2007-07-12 07:55:31 · answer #9 · answered by Midwest guy 4 · 0⤊ 0⤋
Purchasing a home is a mortgage. Owning a home and borrowing against it is a home equity loan.
2007-07-12 07:55:31 · answer #10 · answered by J P 4 · 0⤊ 0⤋