What is a Mortgage?

Generally speaking, a mortgage is a loan obtained to purchase real estate. The"mortgage" itself is a lien (a legal claim) on the home or property that secures the promiseto pay the debt. All mortgages have two features in common: principal and interest.

Buying a home is one of the most important and exciting financial milestones of your life. But before you start you should know how much house you can afford. Finding a mortgage is one of the first steps involved in buying a home.

For most would-be borrowers, the challenge is not in finding a mortgage lender, but in sorting through the number of banks, online lenders, mortgage brokers and others eager to take your loan application. How do you choose which one will offer you the best deal, and competent customer service to boot?

There are many lending institutions that offer a variety of mortgage products. Please contact me for recommended mortgage lenders.

What is a loan to value (LTV)? How does it determine the size of my loan?

The loan to value ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. Each loan has a specific LTV limit.

For 
example: With a 95% LTV loan on a home priced at $50,000, you could borrow up to $47,500 (95% of $50,000), and would have to pay, $2,500 as a down payment. The LTV ratio reflects the amount of equity borrowers have in their homes.

The higher the 
LTV the less cash homebuyers are required to pay out of their own funds. So, to protect lenders against potential loss in case of default, higher LTV loans (80% or more) usually require mortgage insurance policy.


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