Understanding Loans and Mortgages
A Guide to Different Home Loan & Mortgage Options
Once you’ve saved up enough money for a down payment on a house, you’re ready to meet with a mortgage lender to learn about your mortgage options. Stay ahead of the game by learning the home loan basics before that meeting, and you’ll be ready to get a mortgage pre-qualification.
How Mortgages Work
To start, understanding mortgages is important. A mortgage is a loan from a bank or creditor to help you finance the purchase of a home. The home you buy will technically be owned by the bank until you pay back the loan. If you fail to pay back the loan, your lender can take over the house, which is known as a foreclosure.
Your mortgage payment includes several separate payments:
Tip
Different Types of Home Loans and Mortgages
Keep in mind, there are many types of home and mortgage loans available aside from what’s included, so take the time to dig into your options and find what works best for your financial situation. Get in the know by taking a look at some of the most popular options.
The Difference Between a Pre-approval and Pre-qualification
Down Payments and Private Mortgage Insurance
Choosing Your First Mortgage
A little research goes a long way in the world of homeownership. You’re already on your way by taking the time to learn some of the common terms and the basics of home loans. Continue your positive momentum by talking to several different types of lenders to see who offers the best rates and conditions. Getting referrals from your friends and talking to your regular banker is also a great way to start!
Getting a Mortgage Pre-approval
Another smart move to make before shopping for a home is getting pre-approved for a mortgage, rather than pre-qualified. Getting pre-approved shows a seller that your financing is in order and you’re serious about purchasing a home. Want to know more?
More Chapters in This Guide
Steps for First-Time Home Buyers
Not sure where to start when buying a home? Our first time home buyer guide explains what you need to know about buying your first home. Learn more today!
Back to Beginning >Saving for a Home
Saving money is one of the most important steps to buying a home. Learn how to save up for a down payment for a house with our first - time home buyer guide
Chapter 1 >Understanding Loans and Mortgages
Buying a house but confused by financing? Learn about the different types of home loans and mortgages with our first-time home buyer guide.
Chapter 2 >How to Start Looking for a House
Starting to shop for homes but don't know where to start? Learn about what to look for when buying a house so you can find the perfect home for your needs..
Chapter 3 >Putting an Offer on a House
Found the home of your dreams and want to place an offer? Read our tips for making an offer on a house and learn how much to offer to stay competitive in the market
Chapter 4 >The Home Inspection and Appraisal Process
What can you expect from the home appraisal and inspection process? Our homebuyer guide is here to help demystify home inspection and appraisals. Check it out today!
Chapter 5 >Understanding Homeowners Insurance
Choosing the right insurance policy for your new house is another important step in the home buying process. Learn about how homeowners insurance works and find the best coverage for your home today.
Chapter 6 >What to Expect on Closing Day
Closing on a house is an exciting yet hectic time, but don't worry. Our closing day checklist and tips can help you succeed. Learn more from American Family.
Chapter 7 >What to Do After Closing on a House
Congratulations! You've closed on your home and can start making it your own. But there are a few final steps you'll need to take. Use the following resources to make your transition into your new home as smooth as possible.
Chapter 8 >
