For many, the concept of buying property seems completely unfamiliar - and paying for it might make you wonder, “what is ‘the mortgage,’ anyway?” If you’ve rented a house or apartment before, you’re familiar with monthly payments and extra fees for maintaining the property. But how is a mortgage different?
To help you gain a better understanding of what a mortgage actually is and how it works, here is a quick guide to the basics:
You can think of mortgages similar to car loans. You pay monthly repayments with fixed interest until you pay off the loan.
Mortgage loans work because only few buyers have the money they need up front to make this kind of huge purchase. Instead of paying out-of-pocket, a mortgage helps you spread your purchase costs over several years, allowing you to buy homes at lower costs.
Mortgage loans have interest rates and agreed upon repayment periods like any other loan. However, some important distinctions distinguish mortgage loans from other types of loans.
A mortgage is a secured loan, which means it requires collateral - an asset the lender can seize if you default on the loan. In the case of mortgages, the property itself is collateral.
An unsecured loan doesn’t require collateral, but may have higher interest rates or minimum qualifications to help the lender mitigate risk.
You pay your mortgage payment monthly. Mortgage loans comprise four major costs: principal, interest, taxes and insurance. Principal is the actual amount of money you borrow, and interest is the percentage that goes back to the lender.
Property taxes and insurance also factor into your monthly payment. Insurance could be either mortgage insurance or homeowners insurance, depending on which type you have.
Buying a home means you’re responsible for making decisions about the property, but a mortgage can make the concept of ownership confusing. However, the simple answer is yes, you do own your home as long as the terms of the mortgage are met.
Even knowing the basics about a mortgage loan, the process can seem daunting. However, this key information will help guide you through the process of becoming a homeowner.
Knowledge and Experience You Can Count On! For most families the decision to buy a home or sell their home is an exciting and complex adventure that involves a lot of preparation and work. It can also be very time-consuming and costly if you're not familiar with all aspects of buying or selling a home. I can provide you with the best information and resources to help make this experience an enjoyable one. One of my specialties is representing the best interests of St. Lucie County and Martin County FL areas.
My comprehensive, high-quality services can save you time and money, as well as making the experience more enjoyable and less stressful. I have lived in St Lucie County for almost two decades and with over 20 years of experience as a local market expert, I can help you make the most informed decision. Whether you're buying a starter home, your dream home,an investment property, or selling your largest financial asset, I know how to handle every aspect of the buying and selling process. I can strategically market and showcase your home to find you the best deal in this market.
My top priority is to provide you with comprehensive, high-quality service. So when you decide to buy or sell your home, please contact me and let's get started! The secret to the success of Keller Williams is in the quality of its people and the relationships that they have with the communities they serve. Customers appreciate the depth and expanse of local knowledge the company’s career-oriented agents work hard to maintain. The company focus has expanded to offer our clients a full spectrum of real estate related services.
