Mortgage, loan and property. What is a mortgage?

A mortgage is putting a property as a guarantee to a lender as a security for a mortgage loan.

While a mortgage in itself is not a liability or a dept, it is evidence of a debt. It is a transfer of an interest in property, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the property when the terms of the mortgage have been satisfied or concluded.

In other words, the mortgage is a guarantee for the loan that the lender makes to the borrower. In all but a very few states, a mortgage creates a lien on the title to the mortgaged property.

Friday, July 11, 2008

Factors Of Mortgage Approval

When applying for a mortgage, the lender you have selected will take many factors into account. These factors not only influence what type of loans you can qualify for but also what your monthly or by-monthly payments will be and how many years you will take to pay the loan off completely.

Knowing what these factors are and doing what you can to improve them all can make a remarkable difference when you go and see your lender and start the process that will get you your new property.

Some of the fundamental factors apply for just about any loan but are particularly important if you are trying to get a mortgage. The big one is, yep, credit.

How good is your credit?

Get copies of all of your credit reports from the 3 major consumer reporting companies and check each one for possible errors.

Many times they have small errors that can be corrected in just a few weeks (after a simple phone call) and that helps boost your score. If you have many credit cards, pay them all off as well as any other outstanding bills.

If you can, make a nice large down payment, it will always improve your chances of being approved. If your credit isn’t completely top notch, the bigger the down payment, the more likely you will get approved.

If your credit is good, you can still put down as much as possible to lower the monthly payments or decrease the total loan time.

Above all else, never lie to your lender. If you tell your lender that you are a university teacher and they find out you are a shoe sales man who has only had the job for 6 months, you will be totally screwed. Be honest with your lender and your lender will do his best to work with you, not against you.

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