These top lenders can help you lock-in great rates and service on your mortgage, refinance or home equity loan.
3 Million Consumers Trust ConsumerAffairs
Our recommendations are based on what 2,994,462 reviews say.
Sorry, no results are available!
A mortgage is a loan that's used to buy real estate — typically residential property. According to the Consumer Financial Protection Bureau, it's an “agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you've borrowed plus interest.” In other words, it's the legal document you have to sign to finance a house.
A mortgage functions as a lien or legal claim against a property (a single-family house, condo, duplex, etc). In exchange for immediate funds, the borrower must repay the loan with interest and fees over time.
Conventional mortgages require a minimum 620 credit score.
The term refers to the life span of the loan, which is usually between 15 and 30 years. There are also 10-year term options. The mortgage rate refers to the amount of interest the lender charges in exchange for the loan.
Mortgage rates can be fixed or adjustable. A fixed-rate mortgage has the same interest rate for the entire loan term, whereas an adjustable-rate mortgage increases or decreases based on a changing index.
“Mortgage amortization” is the process of paying down home loan debt over time. Homeowners build equity by making payments on their mortgage principal. If you get a second mortgage, you borrow funds with your house as collateral for the loan but don't have to use the funds to purchase a home. Home equity loans and lines of credit are types of second mortgages.
Mortgage refinancing companies replace your existing mortgage with a new loan. The two most common types of home refinance loans are rate-and-term refinancing and cash-out refinancing.
Many homeowners refinance their mortgage to lower their monthly payments, get a better rate, convert home equity into cash or pay off their loan faster. Some mortgage refinance lenders also specialize in debt consolidation strategies.
For example, the home equity conversion mortgage (HECM) is a reverse mortgage backed by the federal government. This program lets you draw on your home's equity to borrow money.
Loan officers work for financial institutions and handle the lending process. On the other hand, brokers negotiate with lenders on your behalf to find a loan program with the best terms for you.
The average mortgage is $840 to $1,200 per month. Most financial experts suggest keeping your mortgage payment below 30% of your monthly gross income (and your total debt-to-income ratio lower than 36%). Use our mortgage calculator to determine how much house you can afford.
Keep in mind that the total cost of a mortgage is more than just the price of your house. As you compare mortgage companies, consider closing costs, mortgage points and prepayment penalties.
Once you've covered all the upfront costs of a home loan, your monthly mortgage payments include principal, interest, taxes and insurance (PITI). In some cases, other regular expenses include homeowners association or condo fees.
These days, you can complete almost the whole mortgage process online. After you've checked your credit score, figured out how much house you can afford and researched the best mortgage lenders, it's time for some paperwork.
Keep in mind that the mortgage lender makes a hard inquiry on your credit when you apply. Hard inquiries cause your credit score to take a small dip, so only try to get preapproved when you're serious about putting in an offer on a home.