Obtaining a mortgage
Whether your are a first-time homebuyer, looking for a larger house, or downsizing, you will probably need a mortgage to buy that new house. If you are looking to buy your first home, this section is definitely for you. If you have been through this process before, this section may provide information that has changed since you last obtained a mortgage.
First, what is a mortgage? Basically a mortgage is a loan from a financial institution that will allow you to buy a house. You have hopefully had some type of loan before, such as a car loan, student loan, or even a credit card. In each case, a financial institution allowed you to pay for something without the need to have all of the cash upfront. A mortgage loan is just another type of loan, so the process in obtaining a loan is very similar, except in this case you are borrowing a lot more money so the loan company will require a lot more information about your finances and will be even more concerned about your ability to repay the loan. This means the process will be more involved and take much more time to get approval, if you get approved at all.
Because everyone's financial situation and needs are different, there are various types of mortgages, and each one could be right for you depending on your current specific situation. These loans come with different terms (length of time), different interest rates, different features, and different costs to you. It's therefore important that you learn all you can about the process and the various loan options so that you are best equipped to know that you are getting the best possible loan for your situation.
Mortgage lending is impersonal and competitive. It is up to you to find the best loan features and terms, and some of this will depend on how much money you have saved to put down on your new house, how much your house costs, how long you intend to live there, etc. Don't pay much attention to who's originating the loan or where the lender is, and don't expect that your bank or credit union will offer you the best deal, although they may be a great place to learn even more about the process and the various types of mortgages.
To obtain not only a mortgage, but the right mortgage for your situation, the following outlines important steps that you should understand and follow: