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BEFORE you go
shopping for a home you should review all your finances. Prepare a
list of all your (and your spouse or significant other) income and expenses.
Review this together and have a good understanding of what buying a home and
paying a mortgage is all about.
If you rent now, you might not be paying the real estate taxes, electric, gas
or electric heat, sewer, water, garbage collection, lawn care, maintenance or
other expenses typical with homeownership. Once you own, you typically do.
Before you buy, create a budget for these expenses.
What is a Mortgage? A mortgage is a method of using property (real or personal) as security
for the payment of a debt.
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The term mortgage refers to the legal device used in securing the
property, but it is also commonly used to refer to the debt secured by the
mortgage.
One of easiest places to begin to get rates is online. You can quickly
compare ADVERTISED rates. Note, however, those rates often includes teasers, or
promotions to lure you in. The rates may rise after a few months or include
other fees. Be aware!
Just as quickly as you apply for a mortgage, you may be confused over all the
terms or items that are requested of you. Be prepared and organized.
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What you will need - On a typical mortgage, you will need at least 2 years tax returns, 2
weeks pay stubs, copies of social security card and drivers license. You will
need at least 2 months bank statements, W-2 Statements or Self Employment
information.
Mortgages are strongly associated with loans secured on
real estate (like a building or land) rather than other property. Arranging a
mortgage is seen as the standard method by which individuals or businesses can
purchase residential or commercial real estate without the need to pay the full
value immediately. It is amortized over the term of the loan. The borrower pays
each month, a portion of the original loan plus the interest on the money that
is outstanding (typically). If you already own a home, then visit our guides to refinance
or home equity.
Also learn what and how to remove or avoid Private
Mortgage Insurance (PMI). For additional information on the home buying
process, see our Home Buying Guide with
information on How to Buy a Home including what to look for from Home
Inspections to Getting a Mortgage.
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