Simply put, a mortgage is a type of loan that is used to purchase or refinance a home (more on refinancing in a bit). A mortgage also referred to as a “mortgage loan” or “home loan”, allows a buyer to purchase a home without having the full cash amount on hand. Most home buyers purchase a home with a mortgage, and even those with the cash to buy a home upfront will use a mortgage to free up other assets.
Like other types of loans, buyers must meet certain requirements to qualify for a mortgage. The three most common requirements lenders ask of buyers are a stable income, a debt-to-income ratio of under 50%, and a solid credit score (this varies depending on the type of mortgage loan). While a mortgage is a type of loan, one key difference between it and other loan types is that it is “secured.” In a secured loan, collateral is promised to the lender if the borrower stops making payments on the loan. With a mortgage, the collateral is the home.
What the mortgage process looks like
The mortgage process can be broken down into six steps:
Pre-qualification and approval
Choosing a mortgage that’s right for you
Shopping for your house
Filling out the mortgage application
Underwriting
Closing
Check out this step-by-step guide to the loan process, and contact a VIP Mortgage Group representative today if you have questions!
Types of Mortgages
There are many different types of mortgages available to home buyers. Beyond more standard-type mortgages, home loans are available for buyers interested in purchasing a more expensive home to loans to help with large-scale remodels. At VIP Mortgage Group, the types of loans we offer include:
Important Mortgage Terms
During the mortgage application process, you’ll likely come across quite a few terms and phrases that will make no sense. Rest assured, you don’t need an entire new dictionary to become familiar with common mortgage industry language, just a handy guide like this one.
Contact VIP Mortgage Group today to speak with one of our mortgage experts and get start on your loan today!
VIP Mortgage Group is a mortgage service provider dedicated to providing our customers with simple, fast and easy borrowing solutions at competitive rates with the highest level of expertise, honesty and integrity.
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