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What You Need to Know About Mortgages

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the mortgage and its typesWhile the economy is showing signs of improving, the housing market is still struggling. This isn’t great, unless, of course, you are in the market to buy a house. Not only are interest rates still at historically low levels, you should be able to get the home of your dreams for a fraction of what it was going for before the credit meltdown.

However, the new rules and regulations regarding money lending and mortgages is something that you are going to have to contend with. It doesn’t matter how great a deal that house is; if you can’t get a mortgage, it doesn’t matter.

One of the best things you can do to improve your chances of being approved is to make sure you have a good down payment. Find out what the bank considers a minimum and double that. This will show them that you are serious about becoming a homeowner and you are putting up your own capital as proof.

Make sure that there are no surprises on your credit report. These days, you can apply online in most cases. Fix anything that will work against you before you apply for the mortgage.

Besides having a good credit history, they are also going to be interested in your employment. Is your job secure? How long have you been working there? Do you make enough to cover the mortgage on the property you are interested in?

Types of mortgages

There are two main types of mortgages: Variable and Fixed. The rest are usually variants and combinations of these two. A fixed mortgage means that you agree to pay a certain interest rate for a specified term, and that rate does not change. A variable mortgage means that your payments will fluctuate according to interest rates. In other words, your payments are dependent upon the interest rate at that time.

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