What is a mortgage?

A mortgage is nothing more than a loan, the intent of these home mortgage loans in Orinda is to allow a buyer of a piece of property to pay the seller of the property in full. As collateral for the mortgage loan the lender, often a bank, holds the deed to the property until such time as the loan has been paid in full. Although the home is technically “owned” by the lender until the loan is discharged the home buyer occupies the property as if he or she already owned it.

There are Several Types Of Home Mortgage Loans in Orinda; the one that is best for a property buyer is the one that best suits his or her financial situation and plans. Many home buyers expect to stay in the house for at least the term of the mortgage, which can be as long as 30 years while others see the purchase as a short-term investment, one which will allow them to move up the home-ownership ladder. Ensuring that the buyer gets the right mortgage takes a considerable amount of time and patience on behalf of both the buyer and the lender.

An important part of negotiating a mortgage is based on the down payment the buyer can make. If the buyer can put a minimum of 20 percent down then there will be no call for private mortgage insurance (PMI). PMI is a requirement for buyers who have little or no equity in the property, the insurance will make the agreed upon payments should the buyer not be able to do so. The lender demands this insurance as it protects his investment as the amount of the mortgage which includes various fees and interest will be higher than what the house is worth. Once the loan has been paid down and the owner’s equity reaches 20 percent PMI is no longer required.

If the borrower misses their payment after PMI has expired the recourse that the lender has is to foreclose on the loan.

Home mortgage loans in Orinda can be fixed or variable rate of interest and the loan can be short or long term. The best loan depends on many different factors but there is a general rule of thumb that applies across the board; a mortgage payment should not be more than 28 percent of the combined income of the couple who qualify for the loan. To qualify the borrowers must have an acceptable debt to income ratio so it is always a good idea to discuss your personal position with a mortgage professional before shopping for a house.

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