Thinking to apply for a mortgage? Things you should know

December 15, 20200

There is a huge misconception that people have about mortgages. They think that getting a home loan is very difficult and requires a lot of leg work.

Though there is nothing like that. If you already knew the procedure, you would’ve thought differently but now as we are here, you don’t need to panic. We have got these simple steps which are the procedure to get the mortgage deal.

Before the procedure, you should know which mortgage is the totally fitted one for you. Therefore, firstly here are some different types of mortgages you should know about.


Mainly there are 5 types of mortgages

Conventional Mortgages
It is a type of mortgage that isn’t covered by the federal government. It is further divided into two different loans

1. Conforming loans
2. Non-conforming loans

Conforming loans means that the amount of mortgage falls within the utmost limit that is set by the (GSEs) government-financed enterprises that brace most U.S. mortgages.

The mortgage that does not meet these regulations is reviewed as non-conforming loans. The loan which is the example and common type of non-conforming loans are Jumbo Mortgages which are large loans and are above the limits set by GSEs.

Note– usually the lenders will ask you to pay private mortgage insurance on these conventional loans if you put down less than 20% of your house’s buying price.

Government Insured Mortgages
the U.S. Government plays an important role in plating home loans for its citizens. There are three government agencies that bankroll mortgages

1. The Federal Housing Administration (FHA Loans)
2. The U.S. Department of Agriculture (USDA Loans)
3. The U.S. Department of Veterans Affairs (VA Loans)

FHA loans: These type of mortgages makes homeownership feasible for the borrowers who cannot afford huge down payments and don’t have undefiled credit.

USDA Loans: This loan helps people with moderate and low incomes to purchase houses in rural places.

VA Loans: These are reasonable-interest, flexible loans for the team of active U.S. military force and their families.

Fixed-Rate Mortgages
This loan keeps the same interest rate for the complete life span of the mortgage. This means that your monthly payment wouldn’t change till the loan gets completed. These loans mostly are for 15-30 years.

Adjustable-rate Mortgages
Contrary to the steadiness of fixed-rate mortgages, Adjustable-rate mortgages (ARMs) have changeable interest rates that can increase or decrease according to the market conditions.

Other Types of home loans
Construction Loans: it is a combination of a construction loan for the project as well as a home loan.

Interest-Only Mortgages: In this type of loan, the borrower pays the interest for only a certain time, and then the monthly payment increases as the principal amount begin to get deducted.

Balloon Mortgages: This is a mortgage for people who have their budget balanced because in this loan you make payments monthly for a certain period and then at the end of that time, you will need to pay the complete outstanding amount in one go.

These are some types of loans you can choose from. Once you understand these, here is the process to get the loan from pre-approval to deal closing.

The process to get a loan

Once the lender collects all the necessary information on the borrower, he checks on two things

1. Capability to repay the loan
2. Readiness to repay the loan

Once the lender is satisfied by the capability and readiness of the borrower, he gives the preapproval of the loan the borrower has chosen.

The application
This is where the true loan process starts. It usually materializes in between the first five days of the loan process. With the assist of a professional mortgage broker, the application is filled by the borrower and all the necessary documents are taken.

Loan estimation
It is a 3-page form that you get within the 3 days after applying for the loan. It includes all the important details of the loan you have requested.

Up to you
Once you have the loan estimate, it becomes your choice to continue with the mortgage company or not. If not, then you don’t have to do anything and if you are in then you will have to write or call the company for the further process.

Once you are down with the informing, your work gets over. Now the company itself will find a lender for you or will provide you the loan.

Credit report
Once they have got a lender, they will ask for your credit report which is to be built by you.

It includes closing disclosure which is a 5-page form including all the details of the mortgage you have chosen.

Once the loan gets approved, your file is transferred to the funding and closing department. This department notifies the broker and closes your file by giving you the mortgage.

So this is the simple process that one needs to go through to get a home loan. Now if you are willing to take one, we have a brilliant option for you. You can hire PierPoint Mortgage for the home loan. We are one of the foremost organizations which can provide you the greatest service.


PierPoint Mortgage, LLC, was founded in 2003 and have been offering brilliant services ever since. PierPoint Mortgage is a nationwide mortgage broker that has over 50 years of mortgage experience.


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