The Five Steps of a Real Estate Mortgage

Real estate mortgage is a loan obtained from lending institutions such as banks to purchase real property so that there is no need to pay for the whole value of the property. Before securing a real estate mortgage, you need to know its 5 most important concepts. Since real estate mortgage concepts can become highly technical, this article will explain it to you in a simple manner.

1. Mortgage Interest Rate Options:

There are three main types of interest rates namely fixed rates, variable rates and tracker rates. Fixed rate interest option gives you the assurance of paying a real estate mortgage amount that is fixed for the whole duration of the loan contract. Variable rates offer more flexibility since these rates depend on the current interest rates issued by banking institutions. Tracker rates, on the other hand, depend on the Central Bank interest rates and can not be increased on whim.

2. Mortgage Option for First time Buyers:

Since first time buyers may suffer form difficulties with mortgage payments. Lending institutions are giving them 2 options: Deferred start mortgages and the Interest-only mortgages. Deferred start mortgages allows you to delay payment for up to four months. This way, you can choose to use your money to pay repair or renovation costs. If you choose this option, the total deferred real estate mortgage amount will be distributed over the remaining real estate mortgage payment terms.
Interest Only Mortgages, meanwhile, are not advisable if you want a longer paying period since you will be paying a considerably high real estate mortgage amount in the long run.

3. 100% Mortgages (First Time Buyers)

This real estate mortgage option is recently being offered in some countries such us those in the European Continent. Most professionals (doctors, lawyers, architects, etc.) are given 100% real estate mortgage approval by banks. The amount, of course, is subject to several terms and conditions that include up to 35 years payment term.

4. Mortgage for People with Bad Credit History:

Do not be discouraged if your preferred lending institution disapproved your real estate mortgage application due to bad credit history. There are still some banks that can approve your loan application even up to 92%.

5. Re-mortgage of Existing Real Property

For long time investors, this real estate mortgage concept helps in purchasing new real properties without spending a dime of their personal money by re-mortgaging their existing real property. Only experienced investors can do these since this option takes a considerable amount of risks.

Foreclosure Listings can assist you in any of your difficulties with real estate mortgage application. Their licensed real estate agents are very knowledgeable when it comes to this particular aspect of the real estate industry.

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