Very few things in life are quite as exciting as buying your first home. It's part of the American dream. And although home prices keep rising, ownership is within the realm of possibility, even for those who don't make enormous salaries. Of course, the larger your down payment, the lower your monthly payments will be. The purchase of a home is probably the largest monetary transaction in the life of the American consumer.
Owning a home is one of the most important financial goals for most families. The American consumer usually goes through three steps when buying a home. Step 1: Locating a desirable home and negotiating for the purchase. This step includes the preparation of and agreement to the contract in which the price and terms of sale are included. Step 2: Arranging for a loan, usually from a savings and loan association, a commercial bank, a mortgage company, an insurance company, relatives, or friends. An application is completed, the home is appraised, the buyer's credit is checked, and the loan is approved or denied. Step 3: Closing the sale, usually with the help of the real estate agent involved and the lawyers representing the seller and the buyer.
There are a lot of different ways a home may be financed. For instance, the prospective home buyer will approach a lender and ask for a mortgage loan. If the loan application is approved, the borrower will sign a mortgage note agreeing to repay the full amount to the lender over a period of time with interest. A mortgage is "a temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt, a contract or deed specifying the terms of a mortgage." (www.yourdictionary.com) Or i ...