Sunday, September 14, 2008

What You Need to Know About Residential Mortgage Services

By Walter A Hilliam

Residential mortgage services are offered to those who wish to purchase a residential property. These usually include mortgages, home equity loans (also called second mortgages) and the refinancing of an existing mortgage.

Mortgages are usually taken out when people wish to buy a home in order to finance the purchase, since home prices are usually much more than people can afford to pay all at one time. Lenders offering residential mortgage services offer a wide variety of financial products with different terms and conditions. It can be a bit confusing, so those seeking need to make sure they are clear on exactly what terms and conditions are included in each loan they are offered so that they can make a fair comparison between their different options. Usually it is helpful to use one of the loan comparison calculators provided by many residential mortgage services companies on their websites.

If you currently have a mortgage and have paid enough principle down so that you have some equity in the house, a residential mortgage services company might be willing to give you a home equity loan or second mortgage in order to finance other major expenditures such as home improvements or paying off other loans with higher interest rates. However, before you get a home improvement loan be sure to keep in mind that you can lose your house if you do not keep up with the payments for this loan.

For those who have mortgages at higher interest rates than the current prevailing mortgage interest rate, residential mortgage services companies may be able to refinance for you and get you a lower interest rate and lower payments. However, this is like getting a new loan to pay off your old mortgage early, so any prepayment penalties will need to be paid, and you will have to pay any fees and closing costs associated with getting a new mortgage, so you need to work out whether your interest and payments will be lowered enough to make paying these costs worthwhile.

Most lenders that offer mortgages offer other residential mortgage services. If you have good credit and a low debt to earnings ratio, it usually isn't difficult to find a multitude of lenders willing to help you out. For those without good credit, it is still possible to find companies to work with you, but you will most likely have to pay much higher interest rates as you will be considered a greater risk.
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