Mortgages For First-Time Home Buyers: The Basics

Extract

[...] Also, when shopping for a mortgage online, you do not have a broker there to advise you and to do all the footwork for you. It is necessary to know exactly what you want and to be willing to put forth a little time and effort to find it. Lead Generation Sites In addition to single-lender websites, there are also a few sites, called lead generation sites (LGSs), that are often advertised as one-stop shops for online mortgages because they work with several different lenders. [...]

[...] Possibly the most important advantage is that lenders regularly offer lower prices online that they do by telephone or in person. Selling mortgages online allows lenders to cut out much of their overhead, such as commission for loan officers and the rent and maintenance costs of a traditional lending agency; online shoppers also benefit since competition forces the lenders to allocate part of the savings to the borrowers. Additionally, online shopping helps borrowers avoid many of the scams used by unscrupulous loan officers because the borrower can check the prices online at any time. [...]

[...] Another less common type of mortgage is the interest-only mortgage, where for the first few years you pay only the interest on the loan without paying down the principle. Term A mortgage term (how long you will have the mortgage) can range from 10 to 40 years and 15 being the most popular choices. Choosing a longer term will raise your interest rate but lower your monthly payments; a longer term also means that you will end up paying that interest for a longer period of time. [...]