What Is a Mortgage?
Whether you are looking to maintain or purchase a home, a plot of land, or real estate in general, and want to make payments over time, then a mortgage is right for you!
A mortgage is a type of loan - specifically designated for real estate purchases - where the borrower agrees to pay the lender through a series of payments. The individual payments themselves are based on a calculation of principal (the total amount borrowed) and interest (the agreed upon annual interest rate). The collateral for the loan comes directly from the property itself.
Borrowers can apply for mortgages through mortgage brokers or through any of the major retail lenders. But, there are many advantages of working with a dedicated mortgage brokerage firm - like Mortgage Superstore, LLC:
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We have access to a vast, nationwide network of lenders: We even have access to lenders that only work with mortgage brokers, and not available to the general public.
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We can save you time: Rather than completing multiple applications with multiple lenders, you just need to complete one application with us and we'll take care of the rest!
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We can find the best-suited mortgage product for you: All mortgages are not created equal - we are able to quickly identify the best mortgage lender and loan type for you based on your financial situation and financial goals.
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We usually offer the lowest available mortgage rates: Because we work with lenders on a wholesale basis, we typically see rates lower than retail lending.
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Dedicated and personalized service: Rest assured, our goal is to make the mortgage process stress-free and easy, and help you purchase your next home. Our experienced and dedicated loan processors are available to help answer any question you may have, and smooth any bumps along the way.
Due to the sizeable amounts involved in mortgages, borrower applications go through a rigorous decision-making and underwriting process. When lenders consider a borrower, some of the factors that are used to determine the total amount they would be willing to lend include:
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Borrower(s) credit score: The higher your credit score(s), the more likely you are to qualify for lower interest rates.
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Interest Rate: The lower your interest rate, the more you can borrow at similar monthly loan payment amounts.
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Down Payment: The more you are able to pay upfront, the less your total borrowed amount will be. Plus, if you are able to make a down payment of 20% or more, you will not have to pay for mortgage insurance, resulting in an even lower monthly payment!
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Debt-to-Income Ratios: There are two debt-to-income ratios that are used to determine the maximum loan amount you qualify for:
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Housing Ratio: Also known as "front-end ratio", this is the percentage of your gross monthly income that is dedicated to paying your monthly mortgage-related expenses. These expenses include principal, interest, property taxes, homeowner's insurance, and mortgage insurance.
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Total Debt Ratio: Often referred to as "back-end ratio", this determines the percentage of your gross monthly income that is dedicated to your total monthly debts. Your total monthly debts can include the mortgage-related expenses (as mentioned above), credit cards, car loans, student loans, and child support.
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Whether your financial status is sparkling or needs some help, know that our mortgage professionals can help you secure the mortgage that best meets your needs!
With so many mortgages out there, it can be difficult understanding the differences between each one. Learn more about the various mortgage types we offer.
Applying for a mortgage is one of the most important and most stressful parts of buying a home. We've shed some light on the mortgage process, and to expect at each phase.
Time is of the essence when it comes to getting a mortgage. Help get to the closing table faster by gathering all of the documents you'll need to show ahead of time!