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Understanding Mortgages Before You Get a Mortgage

The modern mortgage market offers a variety of mortgage loans catering to the needs of homebuyers. The titles and details of these plans can become confusing, especially as new types are introduced continuously. You can make sense of these loan types, however, if you understand the basic principles that govern all mortgage loans.  Again, you can look to your real estate professional for assistance.

What to know about lending and mortgages before you buy

Basic Principles of all Mortgage Loans

All mortgage loans have one of the following features:

As you learn more about the types of financing available, you will notice that some loans appear to have more favorable terms. That may indicate that those loans are, indeed, bargains (and it does pay to shop around), but usually it means that those loans could have some feature that is less appealing to borrowers. For example, shorter-term loans often have slightly lower interest rates compared to longer-term loans. However, the monthly payment for the same amount of principal may be higher because of the shorter term. Variable rate loans usually have much lower interest rates to compensate for the risk the borrower accepts that interest rates will rise in the future.

Holding On to the Mortgage You Already Have

Learn What You Can do to Protect Your Home

Credit Counseling is Available

NAR's Position on Subprime Lending

Above everything else remember you're not alone.  This can happen to anyone anywhere.  Please don't be too embarassed to seek help.

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