length: 1232 words 3.5 double spaced pages owning a home and types of mortgages buying and owning your home is part of the american dream. Although the dream itself has since changed, the home still remains the main focal point. For some families it could take up to a couple of generations before it’s able to have the capabilities of buying a home.

To many people it means a certain achievement that only comes after years of hard work. It is a life altering decision and one of the most important someone can make in their lifetime. Before anything is done, people must understand that it’s an extraneous process and it is a long term project. A real estate agent can help in finding different homes that suit the person’s needs.

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At the department of housing and urban development’s website, you'll want to start searching for a broker as soon as you decide to buy a home. Talk to several and find someone you think you'll be comfortable working closely with 1 having a wide range of options is always helpful. An agent can also help in negotiating the price, and showing what the potential buyer needs after finding a home. A buyer might also need the services of a lawyer, a loan officer, insurance agents, and an accountant.

In all purchasing your own home is a daunting task if you plan on doing it alone. There are many factors that determine the amount of the mortgage and the interest on it. Credit bureaus such as equifax, transunion, and experian determine if the person has enough credit for a home loan.

This is a very important facet because a person’s score can change the rate of interest. Other important factors that decide interest rate are the types of documents presented to the mortgage lenders. A person may have good credit, but may not be able to provide sufficient evidence of enough income. Applicants in this situation may have to enroll in programs such as nina, no income, no assets. The amount of the down payment for a home eventually decides the type of mortgage a person will get. If the buyer cannot put down at least 20% of the cost, he or she usually will have to get private mortgage insurance. There are other options however if a person cannot afford the 20% down payment or obtain the pmi, which increases the monthly payment substantially.

Banks have created programs that finance up to 100% value of the property and divide it into two loans, the first for 80% and the second for 20%. The ‘conventional’ mortgage usually covers that time span at a fixed interest rate. A person can exceed payment on a mortgage, in order to shorten the length of the loan. This eventually works out for the borrower, in he or she will pay less interest in the long run. There are many people looking for homes that are in different financial situations.

If a person has the financial resources they can get a mortgage where they pay a fixed monthly price, then a large final payment. This means that the borrower will have paid off the loan much quicker than a conventional loan. Another mortgage similar to the balloon mortgage in that it allows the borrower to pay off the loan faster is a growing equity mortgage. If the owner can afford the increased payments, this again would greatly reduce the total interest rate paid.

Other people, such as elderly couples, prefer a loan that is relative to the equity of the home, thus providing them a tax free income, which is paid off when the home is sold. According to fannie mae’s official website, you and any of your co borrowers, must be at least 62 years old and either own your home free and clear, or have a relatively low remaining mortgage balance and occupy the property as your principal residence. 1 it is mainly used for people that have high equity on their homes and need quick cash. If a person can’t afford a typical market loan they are enticed in getting a shared appreciation mortgage. This allows the borrower to pay the loan at a lesser rate and at a lower monthly payment.

Essays on Buying a House Text

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