What Is A Mortgage?
Almost everyone needs a mortgage when she wants to buy a house. Most of us don't have the cash to buy the house, we need to get a home loan. A mortgage is a way to borrow money by using property - usually your house - to guarantees the bank that you will pay back your home loan. Banks say that the property 'secures' the mortgage, or sometimes that the property is 'security' for the mortgage. This means that if you don't pay the bank what you owe them for your mortgage, they can take ownership of your house to get their money back.
Getting a mortgage is the only way most of us can afford to buy a house. To make sure they get their money back, the bank in effect owns your house until you pay off your mortgage. Each mortgage payment pays off a little of the principal - the money the bank originally loaned you - as well as a lot of interest on the loan. When you have finished paying back all of the principal you borrowed, the bank gives up its claim on your house and you own it free and clear.
Lenders offer several different types of mortgages and the terms offered for each type vary from lender to lender. Some of the most common types of mortgage loans include fixed rate mortgages where you pay the same interest rate for the life of the loan, adjustable rate mortgages where the interest rate varies over the life of the loan, interest only mortgage where you keep your payments low by paying only the interest on your loan and balloon payment mortgages that keep your monthly payment low by putting off repaying some of the principal.
It pays to shop around for a mortgage -- a small difference in the interest rate can add up to thousands or tens of thousands of dollars over the life of the loan. Be sure to get several quotes from different lenders and compare them carefully to find the best deal. Loaning money for mortgages is a very competitive business - don't hesitate to ask if the lender can do better. If you're working with a mortgage broker, there may be overages and the broker may be willing to take less profit to get the loan. There are several websites that will let you submit a mortgage application to several banks. The services listed below are all free, there's no credit check and there's no obligation:
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Ameriquest Mortgage works with borrowers
who have less than perfect credit. They have over 150 branches nationwide, you can apply at a branch or online.
We have a longer list of lenders that will provide you free quotes for a home mortgage loan here.