Mortage Home Loan

By: EconomyWatch Content   Date: 30 November 2009

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A mortgage home loan is a loan in which a home or real estate is used as collateral. If the borrower defaults on the terms of the loan, the collateral is seized by the lender. Typically, home mortgage loans are long term loans and are meant for buying a home. Before you choose a loan, ensure that you review your credit history and contact various banks or lenders. Also, assess the worth of your home and your needs before opting for a mortgage home loan. More importantly, make sure that you are getting the home mortgage loan at the best possible interest rate. 

Steps in Applying for a Mortage Home Loan

First, the lender will appraise your property to determine the market value of your home. The cost of the appraisal will be included in the closing costs. After completing the mortgage application, you should be ready to furnish the following information to the lender.

  • Your existing debts, the details of which should include the total amount due and the account numbers

  • Bank information, including your name, address, account number and statements for three months

  • Pay stubs, W-2s, proof of employment and income

  • If you are self employed, you should furnish balance sheets and tax returns

  • Divorce papers, if applicable

Documents to Be Signed for a Mortage Home Loan

A borrower is supposed to sign a few forms when closing the home mortgage loan. The person who is selling the home should bring the deed that has to be notarized and signed. This is done to enable the buyer to file the deed at the country Deed Registrar. According to federal laws, the lender has to offer the HUD-1 settlement statement that lists the services of the lender, including the charges and fees. The mortgage note, which includes the amount of the loan, payment due dates, and the account in which the repayment of the mortgage loan should be remitted to, has to be signed. The Truth-In-Lending Statement that includes the interest rate, APR and other costs needs to be signed. Once all these documents are signed, the ownership of the property is transferred to the buyer. Be sure to read all the documents carefully before signing them.


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