Buying A Home/Property Lethbridge | Real Estate For Sale Lethbridge
What Is a Mortgage?
A mortgage is a loan that the borrower uses to purchase or maintain a home or other form of real estate and agrees to pay back over time, typically in a series of regular payments. The property serves as collateral to secure the loan.
Mortgages are available in a variety of types, including fixed-rate and adjustable-rate.
How Mortgages Work
Individuals and businesses use mortgages to buy real estate without paying the entire purchase price upfront. Over a specified number of years, the borrower repays the loan, plus interest, until they own the property free and clear. Mortgages are also known as "liens against property" or "claims on property." If the borrower stops paying the mortgage, the lender can foreclose on the property.
The Mortgage Process
Would-be borrowers begin the process by applying to one or more mortgage lenders. The lender will ask for evidence that the borrower is capable of repaying the loan, which might include bank and investment statements, recent tax returns, and proof of current employment. The lender will generally run a credit check, as well.
If the application is approved, the lender will offer the borrower a loan of up to a certain amount and at a particular interest rate. Homebuyers can apply for a mortgage after they have chosen a property to buy or while they are still shopping for one, a process known as pre-approval. Being pre-approved for a mortgage can give buyers an edge in a tight housing market because sellers will know that they have the money to back up their offer.
Once a buyer and seller have agreed on the terms of their deal, they or their representatives will meet at what's called a closing. The seller will transfer ownership of the property to the buyer and receive the agreed-upon sum of money, and the buyer will sign any remaining mortgage documents.