Getting a loan is our direct solution whenever we are running out of money, when we have to buy something we cannot afford, or when we need money for personal purposes. However, borrowing money from several credit companies can sometimes means going through several hairsplitting procedures. There is a need to prove our identity and capability to pay first before our lenders will give us the money that we need. Having mortgage is one way to prove our payment capability.

These are the types of mortgages

Fixed-rate mortgages

This type of mortgage, as the term suggests, is that there is a fixed rate during the lending process. The amount of monthly payment remains the same throughout the tenure (depending on the payment method on the contract). This may be done in a long period of time in a stable manner. One particular example that renders this type of mortgage is the Federal Housing Administration (FDA). If you are planning to buy a new home, then you must have FDA loan as your mortgage as getting this type of loan is not difficult. This organization only requires a small number of requirement in order for it to be approved. This will benefit borrowers at their first attempt. For as low as 3.5% down payment (based on the price of the purchase), you will be approved immediately. Furthermore, you do not need to wait for your credit score to become good enough to get approval.

Adjustable-rate mortgages (ARMs)

This type of mortgage has a greater advantage. The choice is fully given in your hands. You may begin paying for the loan by a small amount of interest to keep your monthly settlements low. Furthermore, the interest rate of this type of mortgage is adjustable depending on the market interest rate. Many short term home owners may prefer this type of loan. In this type of loan, the lending company usually gives a lower interest rate.

Home prices and Mortgage rate

Here are some housing statistics. The selling rate of median houses in the United States increased up to 56% higher from the month of January 2000 up to January 2007. Between the years 1990 to 2000, there is a 33% increase in the selling rate. However, in the year 2009, the percentage declined to 19% and as of 2012, there is a 11% decline in the selling rate.

Bigger houses usually cost higher than medium built houses. This means if you got a bigger house, there is a higher possibility that you could get more loans than those with medium sized houses. However, this does not mean that medium house owners could no longer be approved for loans. Nevertheless, as expected, they will get less than those big house owners could get.

Median Income Individuals and Mortgage

People with total net salary value that belongs to the middle class will not be banned from getting mortgages. In fact, there are companies and organizations that offer low monthly payments at a low interest to help lower income earner group. With some institutions however, your loans will be based on the total amount you are earning per month.

According to research, in order for a person to avail mortgages, he/she must be earning a total of $98,534 annually for him/her or to fall into the median class who can afford to buy a house worth $483,000.

Crime Rates compare to state and national average

Due to the number of borrowers who could not sustain the payment of the mortgages, the crime rate goes up. It is illegal under the law to deny payment certain mortgages that you are into. Therefore, some of the borrowers who can no longer afford sustain the mortgage, think of the easiest possible way to get money, which is by committing crime.

Conclusion

Due to the high responsibility that is given to the borrower, it is a must to carefully study the loan process and the contract that will be on the mortgage. The lender is obliged to provide you a copy of the loan estimate for you to examine word by word. Contracts are contracts, if you have signed on it, then it may be accredited legally. Get the best offers. Do not just go to one lending company, be sure to go on to another companies and compare their programs, discounts and interests.