Buying a House research paper

Buying a House

Mortgages are loans to finance the acquisition of the property or a house, and the loan is repaid at a predetermined rate within a specified period. The mortgagor gives the mortgagee a lien on the real estate as collateral for the debt. There are distinct types of mortgages available, some offering a fixed while others offer variable interest rate for the entire loan period (Seabrooke, 2006). Different mortgages have distinct merits and demerits and therefore, individuals must be careful while planning or making decision on a mortgage. There are various sources where people can access mortgages.

One of the sources for mortgages is mortgage companies. With the company, one can save on the brokerage fee and other charges. Mortgage brokers can also be the source of mortgages. In the presence of a brokerage, one gets customized assistance. The broker also negotiates for a better deal. A broker also arranges deals accessible from various sources and then help borrower make an informed decision. Individuals can also get mortgage from loans and savings associations. The association might offer lower interest rates than a mortgage company but do not offer customized service. Credit unions are other sources for mortgages with lower rates. However, an individual must be a registered member of the credit union (Seabrooke, 2006). Commercial banks are another source that provides a competitive deal. Lastly, another natural source could be thrift institutions (such as savings banks). However, borrowers should not merely consider the interest rate when choosing between fixed or adjustable rates as there are different factors that will affect the amount of down payment payable.

There are various terms in the mortgage, which include; Collateral, which represents the Property pledged as security. Appraisal, it is a report on the value of the property written by a qualified appraiser. Down payment, refers to the cash paid by the buyer not financed with a mortgage. The buyer incurs various fe……………………………..