Mortgages for the Real World

The mortgage process, if handled correctly, can help reduce some of the stress often felt during the home buying process. However, since there are several steps to completing the process, your CENTURY 21® Real Estate Professional can help you learn more about your options, keep the process on track and on time.

Mortgage 101
We've put together an explanation of the mortgage process to help you understand how it works. Call for more detail on financing your next home.

Interest rates
Back in the old days (before the Internet), home buyers essentially had one choice for financing a home: a traditional 30-year fixed-rate mortgage. Now there are many options. Choosing the right loan for you can be affected by several factors. A mortgage allows you to borrow money from a lender to pay for a home, while pledging that home as security for repayment of the loan. While many people choose 30-year loans, other options include 15-year, and even 10-year fixed-rate mortgages. A 30-year loan will have lower monthly payments, but the amount of interest you pay over time will be higher.
Some choose to go with an ARM, or adjustable-rate mortgage. The interest rate can change during the term of the loan. When the interest rate changes, your mortgage payments will change as well.

Getting Pre-approved
How much house can you afford? Knowing how much you can borrow will help narrow the search for your new home. Your CENTURY 21 Real Estate Professional can help you get pre-approved. Pre-approval means the bank analyzes your current income, debt, assets, and credit history to decide what kind of mortgage payment you will be able to afford. The lender then gives you a document stating your borrowing capability and whether your mortgage can be approved, pending the outcome of several tests and an appraisal.

Down Payment
Many recommend that you put down as much as you can for the down payment. Obviously, the more you put down, the less you will have to borrow."How much do I have to put down?" It depends. It can range anywhere from 3% to 20%. Having your agent work in conjunction with your lender can take a lot of the hassle out of applying for a mortgage and also give you more control over the process. Last year, CENTURY 21 Real Estate Professionals helped thousands of people buy their dream home.