How Much Do You Really Know About Home Mortgage Loans

Just the word "Mortgage" is enough to make most people nervous. Securing a mortgage is the most dreaded part of the home-buying process. But the fact is, getting a mortgage isn't as complicated as it might seem, and the more you know, the easier it will be to navigate the entire experience. Here's what you need to know about getting a mortgage.

• There are many types of mortgages
  It can be difficult to keep straight all the options available today, but it's always a good idea to talk to your real estate agent to learn more. Options range from FHA mortgages, which are backed by the Federal Housing Administration and are a great option for anyone who might need to make a low down payment, to VA loans for veterans and service members. There's also a choice between fixed-rate and adjustable-rate mortgages, which is definitely something you should discuss with your agent.
  
  
• You don't have to accept the first offer
  Most buyers are in a stronger position than they may realize when applying for a mortgage. Remember that you don't need to take the first option that comes along. Shop around. Talk to a variety of lenders until you find the right loan that suits your needs and has terms you can live with. And remember that asking questions is free.
  
  
• It's getting easier to get a mortgage
  They're not just handing out subprime loans like they were before the recession — and it's a good thing — but it is getting easier to qualify for a mortgage than it has been in recent years. Increasingly, many lenders are allowing lower down payments and higher debt levels for borrowers, which is particularly great news for first-time homeowners.
  
  
• Know your financial standing
  Although it's getting easier to secure a loan, it's still important to understand the financial risks and to make sure you have a stable income, a good credit score, low debt-to-income ratio, and enough savings to make a down payment and still have enough left over to live on. The usually-recommended 20 percent down payment isn't necessarily required in all cases, but the more you're able to put down, the less you'll end up paying in interest.
  
  
• Get pre-approved
  Pre-approval for a home loan is a bit more involved than being pre-qualified, but it will give you a more concrete idea of what your budget will be. For what it's worth, being pre-approved also lets sellers know that you're serious about buying. To get pre-approved, you will typically have to supply your prospective lender with documentation showing proof of income, proof of employment, credit and bank account information, and tax documents. In turn, you will get an estimate as to how much they will be willing to offer for a loan.

When you're ready to start your home search, we'll be here to make the entire home search process as simple and straightforward as possible.

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