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Mortgage Basics, Part 2 |
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A mortgage is a loan taken out to buy a house. It is kind of funny that the term mortgage actually comes from two French terms; mort, meaning death and gage meaning pledge. It was originally used to instill the seriousness of such a loan. The person taking out the loan makes a pledge to pay it back. If they fail to pay it back, the property is dead to them, they no longer have it, and if they do pay it all back, then the pledge is dead to them. It was usually assumed that the debt would not be paid back in full. Getting a mortgage is a big deal. You are signing papers for a large amount of money, that will be paid back over a long period of time. You really have no way of knowing for sure what will happen to your financial status over the length of the mortgage. When looking for a house to buy, you should also start looking around at different mortgage options. You want to check your credit rating, and fix anything you can before applying for a mortgage. The better your credit, the lower an interest rate you can qualify for. There are different programs for different groups of people available that can help get a mortgage or will guarantee the loan to the loaner. If you served in any of the armed forces, you may be able to get a VA Loan. With this, the federal government guarantees that it will refund the loaner any money that does not get paid back. This is a great help to someone buying a home, and usually will let them borrow the full price of the house, with no money down.
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