The definition of the word mortgage is ‘the charging of real (or personal) property by a debtor to a creditor as security for a debt (esp. one incurred by the purchase of the property), on the condition that it shall be returned on payment of the debt within a certain period.’
But sometimes there is often confusion when this term or other terms associated with it are used in the real estate world, especially when you are a first time buyer of home. If you are buying a home for the first time in El Paso and hear the word mortgage, here are some things you should know.
Don’t get excited if you hear that you are prequalified for a mortgage. The truth is that anyone can be prequalified. There is no checking of income or credit when you get this letter. The letter or term that you should get excited about is preapproved.
Not everyone gets approved for low mortgage rates that are advertised. If you see an ad about low mortgage rates, chances are it might be for a 10-year one, instead of 30-year mortgages. In addition low rates depend on factors, like how good your credit score is. The higher your credit score is, the lower the rate will be.
One last thing to be aware off when it comes to mortgages is don’t feel compelled to lock your loan. If happen to be refinancing your mortgage or getting a new one for a house to buy, you shouldn’t lock it if a broker gives you that option. What this means is that you agree to the terms of the mortgage and the interest rate, no matter if they go up or down. The reason why a broker asks you this is probably because they don’t want you to shop for other rates from other lenders.