A mortgage is a type of loan used to finance the purchase of a property, such as a home or commercial real estate. It is a legal agreement between a borrower (the homebuyer) and a lender (usually a bank or financial institution), where the lender provides funds to the borrower to purchase the property.
Table of Contents
Here are some key aspects of mortgages:
- Loan Amount: The amount of money borrowed from the lender to purchase a property. This is typically a percentage of the property’s purchase price.
- Interest Rate: The cost of borrowing the money, expressed as a percentage. It determines the amount of interest the borrower will pay over the life of the mortgage.
- Loan Term: The length of time over which the borrower will repay the loan. Common mortgage terms include 15, 20, or 30 years, although other options may be available.
- Down Payment: The initial payment made by the borrower towards the property’s purchase price. It is typically a percentage of the property’s value and can affect the loan amount, interest rate, and mortgage insurance requirements.
- Monthly Payments: The borrower makes regular monthly payments to the lender, which typically include principal (the loan amount) and interest. In some cases, payments may also include property taxes and insurance, which are collected by the lender and held in an escrow account.
- Mortgage Insurance: If the down payment is less than 20% of the property’s value, lenders often require mortgage insurance to protect against the risk of default. Mortgage insurance premiums may be paid monthly or upfront.
- Closing Costs: The fees and expenses associated with finalizing the mortgage loan, such as appraisal fees, title insurance, attorney fees, and loan origination fees.
- Prepayment Options: Some mortgages offer the flexibility to make additional payments or pay off the loan early without incurring penalties. These options can help borrowers save on interest and shorten the loan term.
- Refinancing: Refinancing a mortgage involves replacing an existing loan with a new one, often to take advantage of lower interest rates or to access equity in the property.
- Foreclosure: If the borrower fails to make mortgage payments as agreed, the lender may initiate foreclosure proceedings to take possession of the property.
Mortgages can be complex, and it’s important to carefully consider the terms, interest rates, and options available. Consulting with a mortgage professional or financial advisor can help you navigate the mortgage process and make informed decisions based on your financial situation and goals.
Application Checklist
Typically here are the items needed to get your mortgage started. This check list is very handy to follow to help with a speedy refi or a home purchase. Some lenders may vary in the items that they ask for depending upon your financial situation and type of loan applying for, but here are the basics.
- Signed application
- Signed good faith estimate
- Signed authorization form
- Signed Escrow Waiver
- Signed Privacy Policy
- W-2
- Most recent paystubs (one month)
- Proof of Identification (only one document for the below list is needed
a. Valid Permanent Drivers License (front and back)
b. Valid U.S. Passport (front and page with picture ID)
c. Valid U.S. Military Identification Card (front and back)
d. Valid Resident Alien Card (front and back) - If Self-Employed: Copies of complete signed last two years 1040’s signed (Federal Tax Returns) with all schedules and a current year to date profit and loss statement/balance sheet.
- Most recent bank statement ALL PAGES
- Homeowner’s insurance agent name and number
- Name and phone number of title co. / closing agent – When selecting your title company, make sure they will request payoff information.
- Pay Off information for your current mortgage.
- Property tax bill – If available
- If known – Year built, Acreage, Condo, Dues
Here’s a general mortgage application check list and the list may vary depending upon the mortgage company you choose. Good luck and make sure you shop for the best rate and fees for your mortgage it could save you thousands of dollars down the road. Feel free to pring this mortgage application check list.
Mortgage Rates
Current mortgage and refinance rates
Accurate as of 05/21/2023.
| Product | Interest rate | APR |
| 30-year fixed-rate | 6.775% | 6.854% |
| 20-year fixed-rate | 6.539% | 6.657% |
| 15-year fixed-rate | 5.801% | 5.981% |
| 10-year fixed-rate | 5.558% | 5.790% |
| 7-year ARM | 6.712% | 7.419% |
| 5-year ARM | 6.574% | 7.483% |
| 3-year ARM | 6.125% | 7.204% |
| 30-year fixed-rate FHA | 6.654% | 7.551% |
| 30-year fixed-rate FHA | 5.953% | 6.286% |
Data source: ©Zillow, Inc. 2006 – 2021. Use is subject to the Terms of Use
Mortgage Calculator
A mortgage calculator is a useful tool for estimating mortgage payments based on various factors such as loan amount, interest rate, and loan term. Use interactive calculator here for estimating your payments with mortgage rates Today.
The best mortgage lenders
- Best for lower credit scores: Rocket Mortgage
- Best for flexible down payment options: Chase Bank
- Best for no fees: Ally Bank
- Best for flexible loan options: PNC Bank
- Best for saving money: SoFi
Remember that the best mortgage lender for you will depend on your specific needs and circumstances. It’s important to shop around, compare rates, terms, fees, and customer reviews. Additionally, consider working with a mortgage broker who can help you navigate the mortgage market and find the best lender and loan options for your situation.
