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Mortgage 101

Mortgage 101

Mortgages and mortgage rates are spending a lot of time on the news lately. With so much media presence, it can make mortgages very confusing to new and existing home buyers in the market.

Our team at Raleigh Cary Realty would like to break it down and make it easier to understand mortgages. Whether it is your first mortgage or fifth, we want to share information we share with all of our customers.

4 things everyone needs to know about getting a mortgage are:

  1. Mortgage Lender: The mortgage lender is the company that loans the money to pay for the house. This is the company that will be paid monthly for the life of the loan, typically 30 years. Loans are typically payable in 15 or 30 years.
  2. Types of Loans: Each lender owns a variety of mortgage products, or differing types of loans such as FHA, USDA, Jumbo loans, and Adjustable-Rate Mortgages. When you decide you are ready to purchase a home, you will get a pre-approval from a mortgage company, and they will walk you through what you can afford and which type of loan is best for you to consider.
  3. Mortgage Rates: Depending on the lender and the home you choose will determine the rate of your mortgage. There is a standard mortgage rate that many companies adhere to, but different loan products have different rates. The rate will determine what your monthly mortgage payment is and what you can afford, so it is important to discuss with your lender what rates are associated with which mortgage products before shopping for a home.
  4. Mortgage Payments: Your monthly mortgage payment will include more than just the principal and interest. It will also include an escrow payment, or payment for your insurance and taxes premium saved up throughout the year, and possibly mortgage insurance. It is important to know there will be additional fees on top of the principal and interest each month to ensure the amount fits within your budget.

If you have additional mortgage questions, especially as we see the rates begin to drop again, please reach out to our team at Raleigh Cary Realty. We have a few preferred mortgage companies in Raleigh that we can introduce you to and help you get all of the information you need!

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Our agents write often to give you the latest insights on owning a home or property in the Triangle area.