Mortgages 101: 4 Key FAQs Answered

by Mike on September 13, 2016

Mortgages 101: 4 Key FAQs Answered

When it comes to personal finance, mortgages are one of the biggest concerns. At some point in most people’s lives, they’ll need one. But, very few people understand much on this topic. So, today, I’ve got some mortgage FAQs that I’ll answer for you.

 

What’s A Mortgage Used For?
A mortgage is used to help someone buy a property. Whether it’s a house or apartment, mortgage loans are in place for support. Most people won’t be able to afford a property on their own. It can cost a lot of money, and it’s rare to have so much in your bank. A mortgage requires you to contribute a down payment, and it will over the rest of the property cost for you.

 

Who Supplies Mortgage Loans?
Typically, most people will get a mortgage from a bank. This is because they’re the ones with the most money to hand out. Other people look at different financial institutions, but, they might not get as much money. Banks are where you’re most likely to find conventional mortgage loans. However, you can get something called a private mortgage if you go outside of financial institutions. Borrowing money from an individual lender is a private mortgage. There are various pros and cons to this method. It’s worth finding more info to learn about private mortgages before you decide if it’s right for you. Most people are happy with conventional mortgages from banks, but, they also have some negatives.

 

Can Anyone Get A Mortgage?
Anyone can apply for a mortgage, but that doesn’t mean everyone can get one. It all depends on whether or not they pass the application process.To be eligible for a mortgage, you need to have a good credit score. Lenders will carry out credit checks to ensure their money is in safe hands. After all, we’re dealing with a lot of money here. They need to be sure they’ll get it back, on time. So, before you apply for a mortgage, ensure you fix up your credit score.

 

How Long Does It Take To Get A Mortgage Loan?
Truthfully, there’s no definitive answer to this question. It depends on the lender and the borrower’s application. But, I can tell you that it won’t be as quick as some other loans. If you’re used to getting short-term loans, then the time-scale may shock you here. It’s not a case of applying and receiving approval for a day or two. Generally speaking, it can take upwards of thirty days for an application to be approved. On average, experts say the money is in your account after forty-five days. So, it’s a relatively long process; that’s for sure. But, this is to be expected when dealing with huge sums of money. The application needs to be checked carefully, as your lender doesn’t want to make any mistakes.
There you have it, four frequently asked questions, answered! Hopefully, this piece has helped you learn a bit more about mortgages. If you plan on buying your first house, you can approach this topic with more confidence.

 

***Image thanks to TheTruthAbout***

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