Mortgage - As explained above, the actual mortgage document establishes the home or property being purchased with the funds being borrowed as collateral for the loan. If the borrower defaults on the loan, the mortgage lays out the terms and conditions by which the lender can take possession of the property or home.
If you are unable to qualify for a mortgage on your own based on your credit score, income and credit history, you may be able to qualify by having someone else co-sign the loan for you.
A co-signer on a mortgage shares the responsibility for the loan equally with the primary borrower.
Before you begin the mortgage process:
Not every borrower tries to get prequalified and pre-approved for a mortgage, but attempting at least one of these can give you a good idea of your prospects moving forward.
In both pre-qualification and pre-approval, the lender assesses your creditworthiness and decides whether or not to make you an offer contingent on your ability to prove the information on which that offer was based.
The difference between the two is that, in a preapproval, the lender commits to approving your for the loan provided you can indeed verify all the information used to make that decision, whereas, in a prequalification, the lender makes no such promises.
Not only does pre-qualification and pre-approval give you the confidence to move forward with finding the home or property you wish to buy, if you haven’t already. It also gives you potential leverage with other lenders to try and get a better loan with more advantageous terms for you.
The underwriter who evaluates your application for pre-qualification or pre-approval can give you one of several responses:
Closing on a mortgage is simply “closing the deal” or signing on the dotted line. When you close on your mortgage, that means the money from the lender is transferred to the property seller on your behalf, and the deed for the property is conveyed from the seller to you, the buyer, and the borrower.
In order to close on your mortgage, you must fulfill all the conditions set by the loan’s underwriter. The underwriter will provide you with a checklist of all these conditions, which may include (but are not limited to):
In this guide, you learned the answer to the question, "How does a mortgage work?" and that a mortgage is a document formalizing a loan to purchase a property or home.
You learned it involves a borrower and a lender and includes specific details like the interest and fees charged for the loan and the term and payment schedule.
You also learned the various types of mortgage available, including short-term and long-term, fixed-rate and variable-rate, from conventional and government lenders, along with the pros and cons of each.
You learned as well how to qualify for a mortgage with your income, credit score and history and, if necessary, a co-signer.
Armed with this information, you’re ready to pursue the mortgage you need to buy that home or property you want. The next step is to talk with a mortgage professional to discuss your needs and the options available.
You can find mortgage experts who specialize in the Jacksonville, Florida area at your disposal at 121 Financial Credit Union. Call today or take a look at our mortgage loans to get started on your journey to property or home ownership.