How to Apply For a Mortgage Loan

If you're in the market to buy a new house, then chances are you're also going to need to shop around for a mortgage loan. While there are a number of lenders who would be more than willing to offer you a loan for the property that you wish to buy, you should carefully research your options before submitting your mortgage loan application. Finding the right lender for your needs is only part of the effort, however; once you've compared a number of different loan offers, then it's time to submit your application and apply for the mortgage loan itself.

Costs and Fees

In addition to the actual amount that you borrow with your mortgage loan, there are a number of other costs and fees that you may be subject to in order to purchase your property. A down payment of up to 10% of the total cost of the property is often required for a mortgage loan, and you may also have to take out homeowner's insurance or some other form of insurance in order to protect the lender's investment.

On top of these costs, additional fees may be charged for various aspects of the real estate purchase process and the legal costs involved. Make sure that you know exactly what costs and fees will be charged by the lender that you choose so that you'll be able to anticipate how much you'll need to pay up front and out-of-pocket.

Closing

One of the major costs associated with a mortgage loan is the opening and closing process for legally purchasing the real estate. Some lenders may waive one or both of these costs, but more than likely you will at least be subject to the closing cost as it pays for the filing of legal paperwork and the transfer of ownership from the former owner of the property to you. Some mortgage lenders will allow you to include opening and closing costs in the amount that you borrow, but it's important that you know beforehand whether you'll be able to do so lest you find yourself owing an amount for opening and closing that you can't really afford.

Repayment Options

A variety of repayment options may be available to you when you apply for your mortgage loan. The interest rate that you're charged on the money that you borrow can either be of a fixed or a variable rate, meaning that if it's fixed then it will remain the same no matter what fluctuations interest rates encounter nationwide or if it's variable then it will be able to adjust to rate changes and raise or lower accordingly. You may also have the option of a set monthly payment for a number of years, or you might choose a balloon payment option that allows you a lower payment for five years and then the remainder of the loan becomes due. Decide before you apply the type of interest rate and repayment options that you want, so that you won't have to worry about making a rushed decision later.

Jerry Warner writes general finance and loan articles for the Loans UK Online website at www.loansukonline.co.uk [http://www.loansukonline.co.uk/]