6 Steps on How to Apply for a Mortgage and Everything You Need to Know

Applying For a Mortgage is Very Common

 The most obvious reason is that you cannot afford to buy the house in cash.


However, even with a mortgage, real estate is one of the largest ways to build wealth.

Applying for a Mortgage: Choosing a Fixed or Adjustable Rate

With an adjustable-rate mortgage, your rate starts lower than a fixed rate. It then adjusts based on a predetermined index.


Sometimes, especially with a 5/3 ARM, you would make the same payment as you would have on the fixed loan for the entire introductory period.

When Applying for a Mortgage, Which is better?

No, adjustable-rate mortgages are not the worst product ever introduced and created only for suckers. Even though that is what many pundits want you to believe.

That does not mean they are a better deal or better for everyone. However, there are a few specific situations when adjustable loans are a good choice.

Adjustable loans have their downsides too. One major downside is that you will still have to make higher payments if the rate adjusts, even if you pay down the loan.

Applying for a Mortgage: Conventional Vs. Portfolio Lenders

If you do meet all the standards for getting a conforming loan, then great. However....


if you do not, this is where portfolio lenders come in. Portfolio lenders are institutions, typically banks or credit unions, that offer loans they intend to hold on their own balance sheet or portfolio.


Since they are not selling them off, these institutions make their own rules and loan requirements.


Applying for a Mortgage: 6 Steps

1. Pre-approval 2. Getting property under contract 3. Application 4. Underwriting 5. Commitment 6. Closing

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