George L. Duarte - Mortgage Loans Fremont California Horizon Financial Associates

You Closed On A House: Do You Or Your Lender Own It? You were able to find a house and successfully close on it, so congratulations on becoming a homeowner! Then, you pause for a second and think: does your lender own your house? Some people believe that if they only put 20 percent down on a house, the lender actually owns the other 80 percent. Does this mean that your lender still owns a large portion of your house? This is not the case, but there are some caveats that you need to keep in mind.

Your Name Is On The Title

First, you are the one who owns the house. Your name is on the title, so you assume all of the benefits of owning the home. For example, if your home goes up in value between now and when you sell your home, you alone benefit from the capital appreciation of your home. Your lender isn’t suddenly entitled to more money just because your home is more valuable. You are the owner of your home, and your lender’s name should not be one anywhere on the title.

You Are Under A Legal Obligation To Pay Back Your Loan

Even though you own your home, your lender still has an important legal interest in your home. You are under a legal obligation to pay back your lender, and your lender can start legal proceedings if you do not pay back your loan. For example, if you fall behind on your mortgage payments, your lender can take legal action to repossess your house. This is called foreclosure, and you can be forcefully stripped of the title of your house. Stay on top of your mortgage payments to prevent this from happening.

After The Mortgage Is Paid Off

After the mortgage is paid off, your lender can no longer start the foreclosure process because you do not owe any additional money. On the other hand, other entities could foreclose on you if you do not pay your bills. For example, the government could take your home if you do not pay your real estate taxes from time to time. The laws vary from state to state, so try to familiarize yourself with the laws in your area.

First Time Home-buyers: How to Properly Research Your Mortgage Options For most consumers, buying a house is the largest purchase you’ll make in your life. That’s why it’s important to ensure that you have the best mortgage terms available. With so much at stake, it’s important to have full confidence in both your lender and your mortgage.

So how can you ensure that the mortgage you choose is the right one for you? Here’s how you can evaluate your mortgage options and find the best option for your individual circumstances.

Make Sure You Actually Do Shop Around

According to the Consumer Financial Protection Bureau, half of borrowers consider just one lender before applying for a mortgage, while 70% of borrowers only apply to one lender. While a broker or your bank can be a good source of information about mortgages and may offer great rates, that’s not always the case. The best way to get a great deal on a mortgage is to shop around and see what’s available.

Look For Information From Reputable, Independent Sources

When you’re looking at mortgage terms and evaluating lenders, it’s important that you remain skeptical. Lenders always have an agenda – to earn money on your debt. While lenders can indeed offer you expert information on the mortgage industry, they’re not exactly objective – so make sure that when you consider their offers, you refer to independent experts when deciding if you’re getting a good deal.

Compare Loan Terms, Not Bonus Incentives

Quite often, banks will offer their clients extra mortgage incentives available only to clients. These incentives can include things like free savings bonds or a free credit card limit increase. But just because you’re getting a freebie, that doesn’t necessarily make the mortgage a good deal.

It’s important to consider both the value of the incentive and the cost difference between mortgages. If your bank’s mortgage would cost you an extra $5,000 over the life of the loan compared to a third party mortgage, then your bank would need to give you $5,000 worth of free services in order to make your bank’s loan worth your money. Don’t be fooled by flashy freebies – look at the actual terms.

Finding the right mortgage can be a struggle, especially if you’re trying to do it on your own. That’s why it helps to consult an independent mortgage professional who can advise you on industry standards and help you to get the best terms. For more information or to schedule a consultation, contact your local mortgage advisor today.

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