Are you planning to buy a house for the first time? Then Funding Force will help you understand all the things you need to know about Mortgage for first-time homebuyers like you.
What is a mortgage?
By definition, it is a type of loan offered by the bank or other financial institution that a person can use to finance the purchase of a property, It’s commonly used for buying a home.
Unlike other loans, A mortgage has collateral rights to your home. It means if you don’t pay the bank back on the agreed time they can take possession of your home and sell it in the process called “Foreclosure.”
Principal amount & downpayment
The amount of money borrowed to buy a home is called “Principal.” You can put down a percentage of the home’s purchase price by giving a down payment to decreased your loan’s principal amount. The lenders have a variety of down payment options that can figure out which one is the best option for you.
Lenders will give you charges on the loan that you borrowed and the amount is usually expressed as a percentage called “Interest rate.”
There are 2 types of Interest rates:
1. Fixed Interest rates – It is the most common option for paying an interest rate as it can avoid the risk of paying increased interests over time. It means you will be paying a constant/unchanging rate from your loan. The percentage of fixed-rate is the interest per year and it is a lock in to pay.
2. Variable Interest rates – Variable Interest rates are also known as adjustable-rate mortgages (ARMs). Unlike the fixed interest rate, The rates are adjusting over a period of time affected by the federal reserve and benchmark index.
The major parts of your monthly payments are the principal and interest rates. These are the factors for reducing your debts in a process called “Amortisation.” It is a length of time that will take to pay off the loan and own their home entirely.
It’s also important to know that your mortgage payment also includes taxes that are collected by the local community or government.
Aside from a mortgage loan, it is also important to acquire home insurance suggested by the lenders to cover against disastrous events and other incidents that can cause damage or losses from your home.
What is a Mortgage broker? A Mortgage broker like Funding Force has a connection with the primary banks in the country. We serve as the median between you as a borrower and the bank, you’re borrowing with. We will help you to acquire housing loans in a way that we’re the ones who will communicate to the bank until it got approved. We make the process easier for the borrower and all of these services are free because the bank is the one who will pay us by the commission for all of the approved housing loans we offered to them.
In Australia, 60 % of housing loans came from Mortgage brokers, this means 2 out of 3 people decided to hire a mortgage broker instead of personally going to the bank.
Why you should trust a Mortgage broker?
A mortgage broker like Funding Force is here to assure you to avoid high-interest rates offered by the banks. We make your loaning process easier as we offer the best loan options to choose from numerous banks instead of using your own time and energy going personally to the banks one at a time, filling out forms, and tirelessly waiting for your loan’s approval.
Mortgage brokering is a smart way for you to acquire a housing loan. What are you waiting for? If you want to acquire your dream house, contact us now!