Applying for a Mortgage (Important Info + 6 Steps)

Buying a house can be stressful. For first-time homebuyers especially, there is a lot of uncertainty around applying for a mortgage.

That is why preparing for and understanding the process can decrease some of the stress of applying for a mortgage.

Applying For a Mortgage is Very Common

There are many reasons why as a borrower, you would want to apply for a mortgage. The most obvious is that you cannot afford to buy the house in cash and need to make installment payments on it over the next 15 to 30 years.

With an adjustable-rate mortgage, your rate starts lower than a fixed rate. It then adjusts based on a predetermined index.

Applying for a Mortgage: Choosing a Fixed or Adjustable Rate

Most adjustable-rate mortgages have a few terms: – Introductory rate – Period of the introductory rate – The maximum rate increase per adjustment – Maximum total rate increase – Amortization period

Like most things in life, it depends. No, adjustable-rate mortgages are not the worst product ever introduced and created only for suckers.

When Applying for a Mortgage, Which is better?

That does not mean they are a better deal or better for everyone. However, there are a few specific situations when adjustable loans are a good choice.

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