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Standard Mortgage

When going through the qualification process for a mortgage, you may hear a loan officer say the word "standard mortgage".  What exactly is a standard mortgage in today's day and age?  Let's go over a few of the key components that makes a residential mortgage considered to be a standard type of mortgage. 

 No matter if you are getting a mortgage refinance, or a bad credit mortgage, there are a few things that need to exist in order for a mortgage to be considered of the standard variety.  The first thing is that the mortgage must be a fixed rate mortgage.  This means that the interest rate will stay the same for the full length of the loan.  This means if the mortgage is 30 years in length, you will pay the same interest rate, and exact same monthly payment for the full 30 years.  A fixed rate mortgage is different than an adjustable rate mortgage which allows you to pay on an interest rate that can fluctuate from month to month. 

Another thing that makes a mortgage standard is that a down payment of 3-20% is required.  Most loans require a down payment to be paid in order to meet the guidelines set forth by the investors that are backing the loan.  By being able to get a down payment, it shows many investors that you are able to save money and are able to make enough money to be able to get the down payment that is needed to get the mortgage closed. 

Another thing that makes the mortgage a standard mortgage is that the qualification of the mortgage will depend on your credit score, credit history, work history and more.  This means that a mortgage refinance, a bad credit mortgage or mortgage refinancing to tap into home equity can all be considered standard type mortgages if they are based off of the regular qualification standards.  The standard types of mortgage that exist are offered by any and all lenders.  This means that a standard mortgage is easy to find and that the rates are competitive as lenders know that you can literally go anywhere to get this type of mortgage. 

This competition is great for borrowers as they will be able to get a great rate on a mortgage product that will work best for their purchasing or refinancing situation.  As you can see, the standard mortgage has been around for decades, and most homeowners take advantage of good rates and good terms in order to purchase the home they have always wanted. 

 

  10 Steps to Home Ownership:

Step 1: Are You Ready?

Step 2: Hire a Realtor

Step 3: Get Loan Pre-approval

Step 4: Search for Homes

Step 5: Choose a Home

Step 6: Obtain a mortgage

Step 7: Make an Offer

Step 8: Insure Your Home

Step 9: Close the Deal

Step 10: Avoid Foreclosure

 

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