When a person decides to buy a house, he will usually not pay for the entire cost of the home with cash on hand. He or she will usually borrow the money necessary to purchase the home and make monthly payment to the lender through an agreed period of time to pay off the amount of money borrowed. This type of loan is called a mortgage, and it is usually a long-term loan lasting up to thirty years.
Where to apply for a mortgage
There are many places you can go to find financing options for your home purchase. Most people will usually go to a bank to borrow money. However, there are also private companies that are in the business of providing home loans.
Applying for a home loan can be a very expensive process. There are many fees charged by lenders that are usually unknown by borrowers. These extra costs are never hidden due to the fact that it is required by law to disclose all fees to the borrowers if they advertise a rate. This disclosure law is to protect all potential borrowers from lenders that try to hide fees and upfront costs behind low advertised interest rates.
The interest rates applied to all mortgage loans are not all the same, considering the fact that they are based on the current market rate combined with your credit score. The only difference between private lenders and banks will be the fees they will charge you. Certain upfront costs, such as the loan closing costs, as well as other fees will vary among different lenders. Some lenders even offer zero lending fees and a very low to zero closing costs. Looking around and researching the different possible lenders can potentially save you a lot of money in fees alone.