Most people do not have the amount of money they need to buy a new home in cash. Therefore, they can borrow money from a bank or an outside lending source in order to make the purchase. A mortgage loan allows a home buyer to borrow the amount of money needed to purchase the home, and then make monthly payments with interest to the lender until the debt has been fully paid.
The lender retains the rights of ownership to the property in order to guarantee that the borrower repays the debt. However, the borrower is allowed to occupy the home as if he or she already owns it. Before making the decision to take out a mortgage, it is important to be familiar with all of its components. They include:
- Size: The size of the loan is the total amount of money you borrow from the lender in order to buy your new home.
- Term: The borrower and the lender agree on a particular length of time, or term, that the borrower has to fully repay the loan. The term can be expressed in months or years.
- Interest rate: Lenders charge monthly fees in exchange for lending money to borrowers. This interest rate is usually expressed as a percentage of the total amount of the loan. Lower interest rates mean lower monthly payments. Lenders recalculate your loan’s interest rate each year.
Before deciding to take out a mortgage loan, it is important to familiarize yourself with all aspects of mortgages in order to make a smart and informed decision and to avoid hidden fees and fraudulent practices by lending companies. This can eventually result in an unfair foreclosure on your home.
If you are in danger of losing your home, a qualified Milwaukee foreclosure defense lawyer from the DeLadurantey Law Office, LLC can evaluate your situation and discuss with you your legal options. Contact our offices today at 414-377-0518.