The complexity of mortgage loans can scare off anyone, especially first time home buyers. At BHCU, we hope to simplify this seemingly intimidating process. So, what is a mortgage loan? To put it simply, a mortgage is a way many people purchase a home without having all of the money up front. Most people aren’t sitting on hundreds of thousands of dollars, so this loan makes home-buying doable. Keep on reading for more guidance on how mortgage loans work: 

Not All Mortgages Are The Same

BHCU is here to guide you through the process of acquiring your first mortgage in an efficient way. For starters, it’s important to know that mortgages generally vary from person to person and to do your research to find the best loan rates. Different terms are offered to the various applicants. Those terms are based on income, credit rating, and a variety of other factors. Most mortgages are paid off over the duration of either fifteen or thirty years. The longer loans will have lower monthly payments, but higher interest rates while the shorter loans will require higher payments but the borrower is saving big in interest costs. The interest rate of the shorter loan duration will naturally be lower than the longer loan. Monthly payments are also predicated on the size of the down payment the borrower puts down. The more money put down upfront the lower your monthly payment will be. 

Your Reputation Matters

Seeking your first mortgage can be a daunting task. Our team at BHCU likes to break down the mortgage basics to make this task more reasonable! A mortgage isn’t just given. Like most other loans, a borrower must go through an application process. A borrower’s reputation will be reflected in a credit score/report. Maintaining this score is very important when attempting to get any loan. Other factors such as the borrower’s debt to income ratio and income stability are considered. The good news is that maintaining a good credit score and overall reputation will net you better interest rates.

Steps In the Process:

1. Get Approved: Getting approval upfront will give you a good idea of how much of a loan you will qualify for, saving you time!
2. Shop: Once you have an idea of what you can afford, on comes the fun part: shopping for and finding your future home.
3. Seek Final Approval: Complete the final mortgage application process.
4. Close On Your Loan: This is the point where you will make your down payment and pay closing costs. 

BHCU Is Here For You

We totally understand that trying to answer the question, what is a mortgage loan? Can be a very complicated task. We want you to know that BHCU is here to help through every step of the process. If you are interested in learning more about how a BHCU mortgage loan could impact you, contact us today!