Mortgage Broker Training

Mortgages let people buy homes they might not be able to afford with all cash. Borrowers typically agree to give their lender legal rights to the property they purchase, allowing them to repossess it if they fail to meet the terms of their loan (most commonly by failing to pay back what they borrowed plus interest).

A mortgage is also a type of debt that can help build wealth for homeowners over time as their home appreciates in value. But it’s important to focus on the right mortgage for your needs and to understand what you’re getting into before taking the leap to become a homeowner.

When you’re considering applying for a mortgage, it’s a good idea to use a mortgage calculator to estimate what kind of property you might be able to afford and the amount of your monthly payments, including principal, interest and property taxes. The calculator will also help you compare rates and fees between lenders and make sure you’re prepared for the financial commitment that comes with buying a home.

The first thing you’ll need to think about is how much of a down payment you can afford to make. Generally, 20 percent is considered the standard down payment. However, you may be able to qualify for a lower down payment or even no down payment at all. Your down payment will be used to calculate your loan-to-value ratio, which is the amount of money that will be financed by the lender based on the property’s value.

You’ll also need to consider the mortgage term, which is how long you’ll be responsible for paying back the principal and interest. Most mortgages have a 30-year term, but you can also choose to get a 15-year term or any other length you want. Finally, you’ll need to know about other costs that may be associated with buying a home, like HOA fees, property taxes and homeowner’s insurance.

Once you’ve figured out the number of years you want to borrow, enter that information into the calculator on the left side of the page. Then click the plus or minus signs to adjust the interest rate and loan term in order to see what kind of impact those changes will have on your mortgage payments. The calculator will also show you a breakdown of the payments on the right side of the page.

When you’ve completed your application and been approved for a mortgage, the lender will send you a document called a Loan Estimate that shows all of the costs involved with your mortgage and what they are expected to be. The lender will go over this document with a fine-tooth comb, checking your credit report and other documents you’ve provided to verify that all of the information is correct. This is called underwriting. During underwriting, the lender will look for anything that might suggest you won’t be able to repay your loan, such as recent late payments or bankruptcy.