Home Loan or a Mortgage?

Did you know that a home loan and mortgage aren’t the same things? Though often used as interchangeable terms, the two actually work together to finance a home. Many first-time buyers are unaware of this before entering the process. Knowing the difference ahead of time can help you to have a better understanding of the home buying process.

A home loan is the actual money that is taken out to buy a new home. Home loans typically are only used for residential properties and can be received through a financing company. There are different types of home loans and they can have either an adjustable or fixed interest rate.

A mortgage is all about legality. It is the legal documents that you sign that indicates how you will repay that home loan. A mortgage is a legal verification of your obligation to pay back your home loan in full to your lender. Your new home is the collateral and can therefore be repossessed by your lender when payments are not made. Because of this, a mortgage will always mean the same thing. While that is the case for mortgages, there are several different types of home loans. Here are those types:

Conforming:

Conforming loans will either be lower than or equal to the loan limit set. These loans conform to the basic standards of Freddie Mac or Fannie Mae. 

Jumbo:

Jumbo loans are usually only used to purchase high-end real estate and exceed basic loan limits. These loans do not conform to the basic standards.

Government: 

Backed by the federal government, the guidelines for these loans are often quite strict. They can be harder to obtain but usually have lower interest rates.

Conventional:

Backed by mortgage companies, conventional loans are what most think of when they hear about home loans. These loans usually have higher interest rates to make up for the risk taken by lenders.

Be knowledgeable about the different types of
mortgage loans and some of the basic terminology.

1. To get a better understanding
   of what's the best mortgage for you, it’s important to research reputable online sources and reach out to experts who could lend a helping hand. The more information you’re exposed to, the better.
2. 
   Research customer experience and reputations of the different lenders. This is especially true for first-time buyers, they will need a lender that is willing to assist and help with the mortgage loan process! 
3. 
   A solid and impeccable reputation for a mortgage lender is important as well. Lenders should be proud of a transparent record and a good reputation can solidify consumers’ trust in them. There are numerous
   organizations that are dedicated to receiving complaints
   about lenders and to make sure lenders act according
   to regulation."

LADIES OF REAL ESTATE