A mortgage is a secured loan that you borrow against the value of your assets, in this case your home or property. The terms of the loan or mortgage mostly runs for 25 years, however, you can opt for a term that is shorter or longer depending on your capacity to repay. As long as you are able to meet your repayment schedule, the process is smooth, but once you start defaulting in your repayment, the problem starts. This is when the lender decides to repossess your property so that he can sell it and get his money reimbursed.
A mortgage, therefore, comes with a lot of risks, and deciding on a lender, on the terms of mortgage (closing cost calculator Florida), on the interest and quantum of repayment amount are all vital aspects to consider.
Before taking the plunge, do these!
Be very clear in your mind about how much of loan you can afford to take. While doing this you should take into account how much of expenses you incur in running your home. This would include your personal expenses for food, clothing, electricity and gas bills, fuel bills and other regular state taxes, insurance and maintenance expenses.
Once you have decided on the amount of loan, your next job is to identify a lender. The lender is usually a Bank, a financial institution or a building society. You can search for a lender and decide for yourself with your personal experience or you can get the services of a mortgage broker or financial adviser to make your choice.
Taking the decision based on your own experience has its own pros and cons. Choosing a mortgage without taking the advice of an expert is called and execution-only mortgage. You have to know fully what type of mortgage you prefer, be sure of the property you want to buy, be clear about the amount you wish to borrow, the period of repayment, and the rate of interest for the loan. In some cases you may have to declare that you are taking this mortgage without seeking advice and are aware of the consequences of your action.
If you opt for going through a mortgage broker or financial adviser, you will be in a position to compare mortgages from which you can make your choice. This gives you a wider scope and makes decision making easier. Normally they charge a hiring fee initially followed by a fee when the process is complete and the loan is sanctioned. This generally, is a percentage of the loan amount. Using the advice of an expert is the wiser choice.